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Retail Sales Miss the Mark in November

Tue, Dec 13, 11:11 AM ET, by RetailSails.com


As we have been saying for several weeks now, the over-hyped Thanksgiving weekend results were not as strong as first reported, and the Black Friday bonanza was not enough to save an overall weak November as retail sales came in less than expected and the monthly gain was the smallest since June.

The U.S. Department of Commerce reported that Advance Estimates of U.S. Retail and Food Services sales for November increased 0.2% over the prior month to a seasonally adjusted $399.35 Billion, while sales rose 6.7% compared to the year-ago period. This was the 25th straight year-over-year gain after 14 consecutive months of declines, but the 0.2% monthly gain was the weakest since June and less than the 0.6% rise analysts were expecting.

Total US Monthly Retail & Food Services Sales

For the month, only 7 of 13 categories saw growth over October: Besides Autos (+7.5% YoY, +0.5 MoM), which continue to recover off depressed levels, the only categories to show significant strength were Electronic Stores (+6.4% YoY, +2.1% MoM) and Online Retailers (+13.9% YoY, +1.5% MoM).

Click here to see detailed results by line of business.

Electronics chains were big beneficiaries of Thanksgiving weekend promotions such as flat-screen televisions for under $200, as Best Buy showed today with its Domestic same-store sales posting its first gain after 5 consecutive declines. However, those sales came at a cost as Black Friday promotions led to steep merchandise margin contraction.

Online sales, on the other hand, have been strong all year and have continued the Black Friday/Cyber Monday momentum into December. comScore reported that e-commerce spending for the period from Nov 1st-Dec 9th increased 15% over the prior year to nearly $25 billion.

Weekly U.S. National Weather Trends

Brick-and-mortar chains have been forced to offer free shipping throughout the holiday season to compete with the likes of Amazon, further crimping margins, and last week the online giant further riled traditional retailers with a promotion offering $5 off a purchase of any product if they use its Price Check app in-store.

Sales rose at Clothing Retailers (+3.7% YoY / +0.5% MoM), General Merchandise Stores (+2.7% YoY / +0.3% MoM) and Department Stores (-3.0% YoY / +0.3%), but each has struggled with unseasonably warm weather throughout November and into December which is significantly holding back sales of winter-related merchandise. Though Weather Trends International reported that last week was the first time since early November that temperatures in the nation have been colder than its ten"year average, “the country as a whole trended the warmest in three years.” It’s increasingly likely sweaters and outerwear inventory will have to be cleared at heavy discounts.

Business has softened significantly so far in December as the post-Thanksgiving lull is in full effect. Redbook Research reported that sales rose by the least since June 25th last week and said “Retailers said they had entered the expected "soft middle" of the holiday season. The sluggish sales and slow customer traffic seen in the first week of December carried through most of the second week.”

Retailers are counting on Christmas week to save the season, with chains such as Macy's staying open for 83 hours straight leading into Christmas Eve. However, recent surveys suggest many shoppers are already done with their holiday shopping and only huge discounts will convince them to keep spending. Though business will no doubt pick up over the next few weeks, we believe those hoping for a Christmas miracle will be severely disappointed.


Tagged: consumer confidence, e-commerce, retail sales, retail trends


SDI Glossary: "Trend" Definition
This Article's Word Cloud:   Black   Christmas   December   Department   Friday   However   June   November   Retailers   Stores   Thanksgiving   after   been   business   chains   consecutive   first   gain   have   holiday   increased   into   last   less   merchandise   month   only   over   period   prior   reported   retail   rose   said   sales   save   season   significantly   since   store   than   that   they   throughout   week   were   which   will   with   year

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