Holiday retail sales in the US during 2018 grew 2.9% – lower than expected – over the same period in 2017 to $707.5 billion, states the National Retail Federation (NRF). The numbers – which exclude automobile dealers, gasoline stations and restaurants – fell short of NRF’s forecast of holiday sales from November 1-December 31, 2018 to grow between 4.3% and 4.8% to $717.45 billion and $720.89 billion.
In this context, NRF president and CEO, Matthew Shay, says, “All signs during the holidays seemed to show that consumers remained confident about the economy. However, it appears that worries over the trade war and turmoil in the stock markets impacted consumer behaviour more than we expected. There’s also a question of whether the government shutdown and resulting delay in collecting data might have made the results less reliable. It’s very disappointing that clearly avoidable actions by the government influenced consumer confidence and unnecessarily depressed December retail sales.”
The total retail sales include $146.8 billion in online and other non-store sales, which grew 11.5% over 2017. NRF had forecast that the online sector of retail would grow between 11% and 15% to between $151.6 billion and $157 billion.
During the first half of the holiday season in November, retail sales grew 5.1% unadjusted year-over-year. But December was up only 0.9% year-over-year, while declined 1.5% seasonally adjusted from November. NRF does not count October as part of the holiday season, but much holiday shopping happened earlier, pushing October sales up 5.7% year-over-year. As of December 2018, the three-month moving average was up 0.7% over the same period a year ago.
“Today’s numbers are truly a surprise and in contradiction to the consumer spending trends we were seeing, especially after such strong October and November spending,” adds Jack Kleinhenz, chief economist for NRF. “The combination of financial market volatility, the government shutdown and trade tensions created a trifecta of anxiety and uncertainty impacting spending and might also have misaligned the seasonal adjustment factors used in reporting data. This is an incomplete story and we will be in a better position to judge the reliability of the results when the government revises its 2018 data in the coming months.”
The holiday numbers come as NRF is forecasting that retail sales during 2019 will increase between 3.8% and 4.4% to more than $3.8 trillion.