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Holiday sales take turn for better

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NEW YORK — While neither the government nor individual retailers have issued their holiday or December sales figures yet, it looks like the 2016 holiday selling season may have seen the strongest growth since the mid-2000s.

However, most of the excitement appears to have centered on e-commerce sales growth, and the big winner there, once again, was Amazon.com.

The National Retail Federation (NRF) had issued an optimistic forecast that called for a year-over-year increase of 3.6% in retail sales for November and December. The NRF projection excluded automobiles, gasoline and restaurant sales.

That figure was well above the 2.5% average increase for the preceding decade and above the seven-year average gain of 3.4% since economic recovery began in 2009. The NRF forecast included an estimated increase in non-store sales of 7% to 10% to as much as $117 billion.

In mid-December NRF issued an update that declared November retail sales had grown 5%, driven by a 15.3% jump in non-store sales, which includes e-commerce. Based on that performance, the trade group predicted that holiday sales would meet or exceed its original forecast.

“Consumers were able to take advantage of low prices throughout the first half of the holiday season, checking out with full baskets by paying less even though purchasing was up,” said Jack Kleinhenz, chief economist for NRF. “The combination of job and wage gains led to solid holiday spending by American households.”

Among brick-and-mortar retail channels, health and personal care stores were among the November winners, with sales up 7.7% year over year. Building materials and supplies stores also did well, racking up a 7.5% increase, while furniture and home furnishings outlets followed with a 7.2% rise. But general merchandise retailers experienced a 1.4% decrease, and electronics and appliance stores saw sales fall 2.5%.

Meanwhile, the MasterCard Spending Pulse survey, which is based on aggregate sales activity tracked in the MasterCard payments network combined with survey-based estimates for other payment forms such as checks and cash, estimates that retail sales rose 4% from November 1 through December 24, beating expectations. Online retail sales leapt 18.9%, coming on top of a 17.5% increase in 2015.

According to MasterCard, online sales volume started strongly on Black Friday and maintained momentum through mid-December, driven mainly by specialty apparel, electronics, appliances and jewelry, all of which recorded double-digit gains. According to Adobe Digital, online sales on both Black Friday and Cyber Monday exceeded $3 billion, breaking single-day e-commerce records. Adobe Digital had predicted in October that Black Friday sales would pass $3 billion for the first time and that Cyber Monday would be the biggest online shopping day in history, with sales reaching $3.36 billion.

Moreover, Adobe Digital estimates that total online sales between November 1 and December 20 topped $79.2 billion, an increase of 10.7%. Astonishingly, 49 days out of the 50 days in that span saw e-commerce sales of more than $1 billion a day. Of the total, 69% of the sales were made from desktops, while 21% were booked via smartphones and 10% from tablets.

The biggest winner in the e-commerce space once again appears to have been Amazon.com. The world’s largest web retailer called it its best holiday ever, with more than 1 billion items shipped with Prime membership and Fulfillment by Amazon.

Based on an analysis of 1.7 million online shopping receipts collected between November 1 and December 16, Slice Intelligence found that Amazon.com claimed a huge 39.6% share, followed distantly by Best Buy Inc. with 3.9%. Target Corp. was next with 2.9%, with Walmart garnering just 2.7% despite its heavy investments in e-commerce. In the week prior to December 22, Amazon upped its share to 45.5%, while Walmart moved into third place with 2.6% of online spending tracked.

For brick-and-mortar retailers, the gains will almost certainly be more muted and uneven across channels. Forbes reported that a number of retailers admitted to missing their sales targets and noted that store traffic has been gradually declining over the years.

Nevertheless, overall results should be encouraging. Analytics firm RetailNext estimates that brick-and-mortar sales surged 6.5% in the week ended December 24, and the final week of the month between Christmas and New Year’s can produce up to 10% of total holiday sales.


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