Retail Numbers Underscore US Consumer/eCommerce Strength

Three in a row.

In data provided by the U.S. Commerce Department, retail sales were up for the third consecutive month as of December of last year, and buying was broad-based across several categories – with the exception of autos.

In terms of headline numbers, retail sales overall were up 30 basis points. November sales, revised upward, gathered 30 basis points, too (versus the 20 basis points that had previously been estimated). Looking beyond the sequential showings, December retail sales were up 5.8 percent year over year.

Core retail sales, which exclude volatile segments such as autos and gasoline, show sales up 50 basis points in December. Auto sales were off by 1.3 percent.

Drilling down into the numbers, electronics sales were up 60 basis points, while sales at clothing and accessory stores were up 1.6 percent.

Department store sales were down 80 basis points month on month and were off by 5.5 percent year on year. Results from Macy’s and JCPenney underscored the sluggishness in the sector. Macy’s, for example, said same-store sales were off 60 basis points in the months of November and December (as measured by owned and licensed stores). At JCPenney, holiday same-store sales were off by 7.5 percent. Adjusted results, which exclude appliances and furniture, were off 5.3 percent. And in further evidence of brick-and-mortar malaise, the Mastercard Spending Pulse estimated that retail spending across that category was off 1.8 percent.

In contrast to those results, the Commerce Department reported that sales at non-store retailers, which as a group include online sales (including across platforms like Amazon), results were up 20 basis points from November, and up 19.2 percent from last year. Total non-store sales were $778.4 billion, up 13.1 percent as compared to 2018.

eCommerce sales were also a relatively brighter spot for retailers as they began to report results earlier this month tied to the December quarter. Target, for example, reported that its digital sales were up 19 percent year over year. Mastercard’s own data coming into the end of the year showed that online spending during the holiday season was up 18.8 percent year over year, and online sales were an estimated 15 percent of total retail sales over that holiday period.

Other areas of strength: Spending on food and spirits – as in dining out – was on the rise coming into the new year. Sales at restaurants and bars were up 20 basis points versus November, while surging 4.9 percent versus a year ago.

The Commerce Department results underscore commentary thus far from several companies – including banks – that consumers as a group (and not measured solely by segment) continue to spend. JPMorgan, for example, said that credit card loans were up 8 percent, and card transactions were up 10 percent in what was termed a “robust” holiday shopping season.