Strongest gain since Great Recession as sales beat forecast
The results exceeded NRF’s predicted increase of between 3.6% and 4%, or between $678.75 billion and $682 billion. NRF said the increase was the biggest since the Great Recession. December alone was up 0.4% seasonally adjusted from November and up 4.6% unadjusted year-over-year.
“We knew going in that retailers were going to have a good holiday season but the results are even better than anything we could have hoped for, especially given the misleading headlines of the past year,” NRF president and CEO Matthew Shay said. “Whether they shopped in-store, online or on their phones, consumers were in the mood to spend, and retailers were there to offer them good value for their money. With this as a starting point and tax cuts putting more money into consumers’ pockets, we are confident that retailers will have a very good year ahead.
“Retail has proven once again that it is the most nimble industry in the economy, able to transform and reinvent itself to meet always-changing consumer demands. Retail today doesn’t look like retail 10 years ago and it certainly won’t look the same in another 10 years. But retail is retail, and will always be here to serve its customers.”
NRF Chief Economist Jack Kleinhenz cited a number of factors as contributing to the strong holiday sales results, including unemployment being at a 17-year low, increased incomes, strong consumer confidence and a rising stock market. The season also followed three months with the strongest year-over-year gains for retail sales since the fourth quarter of 2014.
“The economy was in great shape going into the holiday season, and retailers had the right mix of inventory, pricing and staffing to help them connect with shoppers very efficiently,” Kleinhenz said. “Strong employment and more money in consumers’ pockets along with the news of tax cuts clearly helped with the pace of shopping. The market conditions were right, retailers were doing what they know how to do, and it all worked. We think the willingness to spend and growing purchasing power seen during the holidays will be key drivers of the 2018 economy.”
NRF’s numbers are based on data from the U.S. Census Bureau, which reported that overall December sales — including automobiles, gasoline and restaurants — were up 0.4% seasonally adjusted from November and 5.4% year-over-year. NRF’s figures exclude sales at restaurants, automobile dealers and gasoline stations.