Modest Economy Means Modest Holiday Retail Sales
Same-store retail sales increased between 2 and 2.9 percent on the year in the week ended December 14, depending on whom you ask. As measured by the International Council of Shopping Centers and Goldman Sachs, same-store sales climbed 2 percent on the year (+4.8 percent on the week), boosted in part by lackluster sales in the previous week. As measured by Redbook, same-store sales increased 2.9 percent on the year.
The details may vary, but the message is pretty much the same — sales growth is actually pretty modest, all things considered. Between bad weather in the Northeast (first snows of the year in some parts) and a generally beleaguered consumer, holiday shopping this year has been unexceptional.
Consumption drives a majority of economic activity in the United States. Consumer spending accounts for as much as 70 percent of gross domestic product, making retail sales a highly watched economic metric. Although the ICSC-Goldman and Redbook store sales reports represent only about 10 percent of total retail sales, mostly covering general merchandise, the data can help provide insight into the health of the overall economy. If spending is strong, then businesses are likely to do well; if spending is weak, the opposite.
The ICSC-Goldman and Redbook reports provide a timely snapshot of retail conditions but offer a less complete picture than the U.S. Census Bureau’s monthly sales report, which lags by about a month. The agency released its advance report for November retail and food services sales on December 12.
The report showed better-than-expected sales for the month. Sales increased 0.7 percent from October and 4.7 percent on the year to a total of $432.3 billion, compared to expectations for a slightly more modest increase of 0.6 percent.
The picture offered by the sales data is echoed in self-reported consumer spending data collected by Gallup. Gallup’s data show that daily spending rose sharply from about $83 to $100 at the end of November but rapidly fell back to about $82 following the Black Friday shopping weekend and the first week of December. These spending levels, though, are still above where they were in 2012. Daily spending estimates of $91 for November outpace the $73 calculated during the same period in 2012.
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