RETAIL SALES UP 0.4 PERCENT IN JANUARY

January retail sales grew a solid 3.8 percent unadjusted year-over-year and 0.4 percent seasonally adjusted from an already-strong December, according to calculations released today by the National Retail Federation. The numbers exclude automobiles, gasoline stations and restaurants.

“The healthy monthly gain was driven by January’s strong payroll gains, retail employment gains and business sentiment.”
Jack Kleinhenz
NRF Chief Economist

“The retail industry started the year on a high note, continuing the momentum from the 2016 holiday season. The healthy monthly gain was driven by January’s strong payroll gains, retail employment gains and business sentiment,” NRF Chief Economist Jack Kleinhenz said.

“We haven’t seen strong January growth in several years, which indicates that consumers are increasing their spending and remain the leading driver of the economy,” Kleinhenz said.

There were broad-based monthly increases across the majority of sectors, with the exception of non-store, which was flat in January.

A few specifics from the report include:

  • Online and other non-store sales were flat over the previous month and increased 14.5 percent unadjusted year-over-year.
  • Sales at clothing and accessories stores increased 1 percent seasonally adjusted from the previous month and increased 0.4 percent unadjusted year-over-year.
  • Sales at general merchandise stores increased 0.9 percent seasonally adjusted over the previous month and decreased 1.4 percent year-over-year.
  • Electronics and appliances stores’ sales increased 1.6 percent seasonally adjusted over the previous month and decreased 1.7 percent unadjusted year-over-year.
  • Furniture and home furnishings stores’ sales were flat over the previous month and decreased 0.3 percent unadjusted year-over-year.
  • Sales at building materials and supplies stores increased 0.3 percent seasonally adjusted over the previous month and increased 6.6 percent unadjusted year-over-year.
  • Sporting goods stores’ sales increased 1.8 percent seasonally adjusted over the previous month and decreased 3.7 percent unadjusted year-over-year.
  • Sales at health and personal care stores increased 0.7 percent seasonally adjusted over the previous month and increased 9.4 percent unadjusted year-over-year.

Retail Sales See Solid Gains in First Half of Holiday Season

November retail sales grew a solid 5 percent year over year and 0.1 percent from an already-strong October as consumers found the deals they were hoping for both online and in stores and showed their purchasing power during the first half of the holiday season, according to calculations released today by the National Retail Federation. Online and other non-store sales grew 15.3 percent year over year, reflecting the growth of online shopping. The numbers exclude automobiles, gasoline stations and restaurants.

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

“Consumers have the wherewithal to spend but households remain measured and rational, which is no surprise given their history since the recovery began in 2009,” Kleinhenz said.

There were broad-based monthly increases across the majority of sectors with the exception of sporting goods.

November’s results indicate that retail sales for the holiday season will meet or exceed NRF’s holiday sales forecast, which anticipates an increase of 3.6 percent over last year’s level for November and December. For a look into the art of forecasting, read Kleinhenz’s article: The Art and Science of Economic Forecasting.

A few specifics from the report include:

  • Online and other non-store sales increased 0.1 percent seasonally adjusted over the previous month and increased 15.3 percent unadjusted year-over-year.
  • Sales at clothing and accessories stores were flat from the previous month and increased 1.9 percent unadjusted year-over-year.
  • Sales at general merchandise stores increased 0.1 percent seasonally adjusted over the previous month and decreased 1.4 percent year-over-year.
  • Electronics and appliances stores’ sales increased 0.1 percent seasonally adjusted over the previous month and decreased 2.5 percent unadjusted year-over-year.
  • Furniture and home furnishings stores’ sales decreased 0.7 percent seasonally adjusted over the previous month and decreased 7.2 percent unadjusted year-over-year.
  • Sales at building materials and supplies stores increased 0.3 percent seasonally adjusted over the previous month and increased 7.5 percent unadjusted year-over-year.
  • Sporting goods stores’ sales decreased 1 percent seasonally adjusted over the previous month and increased 1.6 percent unadjusted year-over-year.
  • Sales at health and personal care stores increased 0.1 percent seasonally adjusted over the previous month and increased 7.7 percent unadjusted year-over-year.

More people shopped over Thanksgiving weekend than last year — but they spent less

About 154 million shoppers made purchases at stores or on e-commerce sites this holiday weekend, the National Retail Federation reported Sunday, a bump up from the 151 million people who last year participated in the annual barrage of Black Friday deals.

And though it is encouraging for the retail industry that more consumers opened their wallets this time around, it wasn’t all good news: Average spending per person was down to $289.19 from $299.60 in 2015.

Matt Shay, the chief executive of the National Retail Federation (NRF), attributed the decline in spending to just how deep and broad the discounts were over the four-day weekend. While the promotions offered during this period were probably preplanned and thus baked into the retailers’ sales plans, it could prove a troublesome dynamic for them if ultra-deep discounts end up being needed all season long to get people shopping.

But other factors could have contributed to the decline in per-person spending: Retailers have been spreading their Black Friday deals out over a longer stretch, so it’s possible that many people pounced on offers several days before Thanksgiving even arrived. And NRF’s survey found that about 122 million people plan to shop on Cyber Monday, up from 121 million last year. So perhaps some consumers are holding out for the fresh batch of deals that will arrive after the weekend comes to an end.

The survey results reflect the increasing importance of e-commerce in the retail landscape. This year, about 108.5 million people shopped online over the holiday season, compared with 103 million last year. Meanwhile, the number of people who shopped in stores fell to 99.1 million from 101 million last year.

Indeed, other data released this weekend offers evidence that online spending was strong on Thanksgiving and Black Friday. Adobe, which analyzed 22.6 billion visits to retail websites, reports that a record $3.34 billion was spent online on Black Friday, up 21.6 percent from the previous year. Sales on Thanksgiving Day were up 11.5 percent to $1.93 billion.

Adobe’s research found that top-selling items included iPads, Samsung 4K televisions and toys such as Lego Creator sets and the Barbie Dreamhouse.

The NRF had earlier projected that the retail industry would see a 3.6 percent increase in sales this holiday season over last year. That would be significantly better than the 3 percent growth registered in 2015. The trade group’s chief economist, Jack Kleinhenz, said Sunday that he believes that prediction “holds up pretty well” right now, even as some have asked whether the surprising election results might have altered consumers’ mind-set.

Experts say that in a presidential campaign year, we typically see that the election serves as a temporary distraction, with shoppers getting their gift-buying started a little later than they might otherwise. NRF’s survey seems to reflect that dynamic: About 23 percent of respondents said they hadn’t started their holiday shopping yet, compared with 19 percent last year. And a smaller share of people have finished their holiday shopping. This year, just 9 percent of shoppers have done so, compared with 11 percent last year.

 

November 27 at 3:53 PM

The Washington Post

Photo:Byron Siekavizza wheels his television to his car as he gets a jump-start on shopping for deals at Best Buy on Thanksgiving in Alexandria. (Nikki Kahn/The Washington Post)

Higher Wages And Easy Credit Likely To Spur Holiday Sales, Retailers Say

Rising wages and cheap loans are setting the stage for a strong holiday season, according to retailers, consultants and pollsters.

On Tuesday, the National Retail Federation predicted a 3.6-percent increase in holiday sales, compared with 2015. That’s considerably better than the 10-year average gain of 2.5 percent for the holiday period.

Why the optimism? “People have more money in their pocket and an expanded use of credit,” NRF chief economist Jack Kleinhenz said on a conference call with reporters.

The industry trade group expects sales to hit $655.8 billion, up from $626.1 billion last year. Kleinhenz says consumers are being buoyed by low unemployment, rising income and low interest rates.

Other studies, done by consulting firms such as Kantar Retail, Deloitte and theInternational Council of Shopping Centers, all forecast holiday spending growth of 3.2 percent to 4 percent.

The projections reflect not only easy credit and improving incomes, but also rising confidence. Last week, the University of Michigan raised its September Index of Consumer Sentiment to 91.8, a 4.6 percent increase over last year. In its latest report, the Conference Board said consumer confidence has reached its highest levels since August 2007.

Still, things can go wrong, as they did last year. NRF says unusually warm weather in much of the country in December 2015 caused seasonal sales to come in $4.4 billion below expectations.

And this year, there could be another big “unknown” that disturbs consumer confidence. When asked if surprising election results might shake holiday spending, Kleinhenz downplayed the threat, saying the economy “is a big aircraft carrier, it’s not going to turn on a dime.”

But retail analysts say one thing is certain: more shopping will be done online. The NRF forecasts a 7 percent to 10 percent increase in sales occurring outside of stores, such as online purchases. Other consultants predict even higher upticks in online sales, some as high as 17 to 19 percent.

College student Tony Fitzgerald, who was shopping for clothes in Washington, DC, on Tuesday, says he shares the sense of rising optimism as the economy improves. “I definitely plan on spending more this year than last year,” he said. “It just feels right.”

Christmas Sales Are Expected to Be Strong This Year

Retail sales should jump a solid 3.6% this year

Finally.

U.S. retailers can expect a strong holiday season this year, buoyed by income gains and rising consumer confidence according to the National Retail Federation.

The industry group forecast holiday season sales—excluding car sales, gas and restaurants—would rise 3.6% to $655.8 billion, well above the 10-year clip of 2.5% growth and better than the 3% rise for the 2015 Christmas period. And online business should be a big help, rising as much as 10% during the period.

The holiday season is crucial for many retailers, making or breaking the year for some chains and generating as much as 30% of sales.

2016 has proven to be a challenging year so far,particularly for stores like Macy’s, M 0.77% Kohl’s KSS 0.91% and Target TGT -0.04% , which had to deal with sales declines last quarter. Shoppers are moving online and also away from apparel, making it tough going for many such chains. A notable exception has been Walmart WMT -0.36% , which has fared well thanks to improved customer service, fewer out-of-stock items, and an improved e-commerce site.

And as Walmart and Amazon.com AMZN -0.32% have shown so far this year, retailers will engage in pricing warfare to outdo one another: Target for one has said it needs to re-emphasize its low prices in its marketing given the competitive environment. And weak traffic at hundreds of malls is hurting the like of Macy’s and Gap Inc GPS -0.18% .

But at least shoppers are in a better mood heading into the holiday season. “Consumers have seen steady job and income gains throughout the year, resulting in continued confidence and the greater use of credit, which bodes well for more spending throughout the holiday season,” NRF chief economist Jack Kleinhenz said in a statement, adding that anxiety about the outcome of the election could weigh on shoppers’ mood.

And once again, retailers will have to fight extra hard with Amazon to give shoppers a reason to come to stores, or at least to their websites. Last year was the first year more shoppers went online on Black Friday than to stores. This year eMarketer expects digital sales to surpass 10% of total holiday season revenue for the first time, while a recent study found that nearly half of all online shopping searches begin on Amazon.

In a separate forecast, PwC estimated holiday spending would increase 10% during the 2016 season, though stores would struggle to get their share since shoppers will be spending proportionately more on experiences and travel.

a OCTOBER 4, 2016,

Holiday sales to rise 3.6 percent this winter: NRF

A more confident group of consumers are expected to loosen their purse strings this holiday, and are seen sparking an acceleration in retail sales growth over last year.

The National Retail Federation on Tuesday said it expects retail sales excluding automobiles, gasoline and restaurants to rise 3.6 percent in November and December, to $655.8 billion. That would mark an acceleration over last year’s 3 percent increase, and would easily top the 10-year average of 2.5 percent growth.

The trade organization’s forecast, considered the industry benchmark, is based on an economic model that factors in consumer credit, monthly retail sales and personal income.

NRF anticipates non-store sales, which skew toward digital, will increase between 7 percent and 10 percent, to as much as $117 billion.

“We have a lot more people working this year,” Jack Kleinhenz, NRF’s chief economist, told reporters.

When factoring in other indicators like wage growth and higher home prices, “our general sense of the economy is that we’re in better shape than we were last year,” Kleinhenz said.

Source: NRF

Retailers got off to a rocky start in 2016, as last winter’s unseasonably warm temperatures left their shelves stocked with coats and scarves. Stores were forced to aggressively discount these items to make way for spring goods, cutting into their margins. Retailers have finally gotten their inventory levels in check, boding well for their profitability this season.

Yet even as more Americans are working and receiving slightly higher paychecks, they’ve been reluctant to spend on traditional retail goods — namely apparel. Broad-based discounting has also cut into retailers’ top lines, requiring them to sell more items to record a gain.

And weather once again took a toll on sales in August and September, thanks to a warm back-to-school and early fall selling season. High temperatures dented apparel specialty stores’ revenue by $393 million during those two months as compared with the prior year, according to new research by Planalytics.

More broadly speaking, data from the Commerce Department shows that retail sales in August slipped on a monthly basis for the first time since March.

Despite the slowdown, Planalytics predicts temperatures on the densely populated East Coast will be more in line with typical years this holiday, which should help spur demand for cold-weather categories. And while some holiday purchases may be pushed back because of the election, the trade organization said it does not anticipate political uncertainty to dent sales.

“This year has not been perfect,” NRF President Matthew Shay conceded. “Overall we think this is a realistic number and very reflective of the current environment.”

Like NRF, separate forecasts from Deloitte, AlixPartners, the International Council of Shopping Centers and RetailNext are all calling for growth between 3.2 percent and 4 percent. PwC expects a more robust 10 percent lift in spending; unlike the other predictions, its forecast includes spending on restaurants and travel.

Retail sales excluding automobiles and parts rose 2.8 percent through August, according to the Commerce Department.

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CNBC

Forecast: Holiday Sales to Increase 3.6 Percent

The first forecasts for the upcoming 2016 holiday season have been released, and they predict that retailers will enjoy solid sales during the crucial season which can comprise more than 20 percent of a retailer’s annual business, according to the National Retail Federation, the Washington D.C. retail trade organization.

Retail sales during November and December, excluding auto, gas and restaurant sales, will increase 3.6 percent to $655.8 billion, according to the NRF, which released its forecast on Oct. 4. Deloitte, the auditing, consulting and risk management company, forecast that holiday retail sales will increase 3.6 percent to 4 percent, according to a statement released Sept. 21. Retail sales should exceed $1 trillion during the season, said Daniel Bachman, Deloitte’s senior U.S. economist.

“Consumers have ramped up their spending this year on the back of a strong labor market. We also expect slightly higher growth in disposable personal income during the upcoming holiday season compared with last year,” he said.

During a conference call, Jack Kleinhenz, the NRF’s chief economist, also noted that economic indicators support predictions that sales will increase during the holiday despite gloom about the economy. “Certainly there will be some speed bumps that come along,” he said.

But with unemployment low—it is 4.9 percent, according to the Bureau of Labor Statistics—and consumer confidence increasing—it is at the highest level since the recession, according to a Sept. 27 statement from The Conference Board—things look good for the U.S. consumer.

“They have more money in their pockets, but they haven’t over-leveraged themselves,” Kleinhenz said.

Kleinhenz also is confident that the economy is in a much stronger position than it was last year when the NRF missed its holiday forecast.

“It would be a different picture if we had higher unemployment. We’ve been adding jobs, we aren’t at a break-out speed, but I don’t see where people are going to fall off of the side of the world and stop spending,” he said.

Last year, the NRF predicted that holiday retail sales would increase 3.7 percent. By the time the season’s last receipts were counted, the NRF announced that 2015 holiday sales had only increased 3 percent. Matthew Shay, the NRF’s president and chief executive officer, blamed the missed forecast on warm weather during the holiday season, inventory issues and retailers offering deep discounts early in the season.

The NRF also forecast sales increases for e-commerce and catalogs during the 2016 holiday season. It is forecast to increase between 7 percent and 10 percent to as much as $117 billion. Deloitte also predicted a robust forecast for holiday e-commerce sales, saying online sales will increase 17 percent to 19 percent, reaching $96 to $98 billion during the 2016 holiday season.

By Andrew Asch | Tuesday, October 4, 2016

Retail after Brexit

“Brexit” i.e. Britain’s exit from European Union marked June 23rd 2016 as one of the most important chapter in the history of Britain and World. Although the outcome of brexit is still ambiguous but its effect on business is important to understand. The effect on prices, competition and living standards is likely to be a key factor at the bottom of any perceived success or failure of Brexit. This article is an attempt to analyze the potential effects of brexit on the retail environment.

Impact of Brexit

According to the latest Retail Sales Monitor Report released today, produced by KPMG and British Retail Consortium (BRC) retail sales were down by 0.5% on a like-for-like basis from June last year, when it increased by 1.8% from 2014. This downfall seems to be majorly because of anticipation of brexit voting results.

There are lot of reasons why aftermaths of brexit seems to be an overall negative for retail in UK and Europe. Let’s see some of the major reasons for negative impact:

1. Economic theory suggests that uncertainty of outcome of this vote is likely to have a detrimental effect on consumer spending and affect consumer confidence (which is already fragile) by creating an incentive to postpone big spending decisions and increasing the propensity to save. Consumers are likely to tighten their belts until they deem the economy to be secure. In words of Jack Kleinhenz, NRF Chief Economist –

“A big risk to the brexit issue is the uncertainty and volatility that puts pressure on financial conditions.”

2. According to HSBC, brexit would wipe 20% off the value of sterling; whilst the value of the euro is also likely to be damaged. For retailers with supply chain in Europe and the world this would mean higher costs to be passed on or absorbed, driving inflation or damaging margins. International tariffs are also likely to be increased and thereby increase in prices in the UK unless trade negotiations produce a successful outcome.

3. Brexit would end the free movement of labor from EU into the UK. People would still come into the UK, but without free access and permanent residency rights. This would result in higher wages and fewer workers which will lead to increase in retail automation, enabling retailers to reduce their operating costs.

Impact of Brexit

Impact of Brexit

Across retailers – varied impact

All retailers will not be affected equally. While grocery is the one to be affect minimum, fashion retailers are most at risk from the brexit fall-out as they buy a significant amount of goods overseas and pay in dollars. They will be hammered by increased import costs from the falling value of the pound. While fashion is most likely going to suffer from this separation, discount retailers are likely to benefit because of consumers conservative spending habits.

What next?

These seem to be the most likely scenarios but we don’t know actually what a world post-Brexit would look like. The likely impacts depend upon how well the process is managed, the shape of future relationships between UK & EU and where they land. But retailers need to be careful; this unpredictability should not be used as an excuse for not acting. Brexit will most likely impact the potential fundamental areas like supply chain, workforce and manufacturing, so some serious strategy planning must start now in order to avoid looking at a blank piece of paper later on.

 Aakash Varma | Jul 18, 2016

RETAIL SALES GROW AT ‘SOLID’ PACE, UP 0.8 PERCENT IN JUNE

Retail sales (excluding automobiles, gasoline stations and restaurants) continued to grow in June and were up 5.1 percent year-over-year, the National Retail Federation said today. Retail sales rose 0.8 percent unadjusted over May, according to NRF’s calculations.

“The consumer sector remains a visible and healthy force in the economy and is expected to fuel growth in the second half of 2016.”
Jack Kleinhenz
NRF Chief Economist

“June’s retail sales grew at a solid pace on the heels of a strong showing for both May and April,” NRF Chief Economist Jack Kleinhenz said. “Consumer spending rebounded strongly in the second quarter after two weak previous quarters. Additional job gains and rising wages are supporting the strength in retail sales and should provide momentum going into the second half of 2016.”

Most retail segments reported monthly gains, except for clothing and clothing accessories that reported a decrease and electronics that remained flat. Outsized gains were evident for building materials and supplies and were probably related to the strength in the housing market. In June, the three-month moving average of retail sales on a year-over-year basis increased 3.8 percent unadjusted.

“The bottom line is that today’s data shows that the consumer sector remains a visible and healthy force in the economy and is expected to fuel growth in the second half of 2016,” Kleinhenz said.

A few specifics from the report include:

  • Online and other non-store sales increased 1.1 percent seasonally adjusted over the previous month and 13.9 percent unadjusted year-over-year.
  • Sales at clothing and accessories stores decreased 1.0 percent seasonally adjusted over May and decreased 0.1 percent unadjusted over last year.
  • Sales at general merchandise stores increased 0.4 percent seasonally adjusted over the previous month and 1.1 percent year-over-year.
  • Electronics and appliances stores’ sales stayed flat at 0.0 percent seasonally adjusted month-to-month and decreased 3.7 percent unadjusted year-over-year.
  • Furniture and home furnishings stores’ sales increased 0.5 percent over the previous month and 3.0 percent unadjusted over last year.
  • Sales at building materials and supplies stores increased 3.9 percent over the previous month and 7.4 percent unadjusted year-over-year.
  • Sporting goods stores’ sales increased 0.8 percent seasonally adjusted month-to-month and 6.1 percent unadjusted year-over-year.
  • Sales at health and personal care stores increased 0.7 percent seasonally adjusted month-to-month and 8.2 percent unadjusted year-over-year.

Robin Roberts July 15, 2016