Retail Sales Fell in November, Despite Black Friday
Retail sales fell in November, with spending on even traditionally popular holiday gift categories like clothing and sporting goods declining, a sign that high prices for food and gas are affecting how much people have left in their budgets for more discretionary items.
U.S. retail sales fell 0.6 percent in November from October, the Department of Commerce said on Thursday. The figure does not account for price changes.
Spending did increase in some areas, from the previous month, including at food and beverage retailers and health and personal care stores. But the report highlights how inflation has changed the way consumers are approaching the holiday season. For example, Americans are whittling down the number of people they are giving gifts to, according to data from KPMG.
“Those are some signs that those core categories are just taking quite a bit of our budget away and we can only do so much during the holiday season,” Matt Kramer, KPMG’s consumer and retail national sector leader, said.
November marked the official start of the holiday shopping season. Nearly 200 million Americans shopped during the Thanksgiving weekend, which included Black Friday and Cyber Monday, according to the National Retail Federation, an industry trade group. The average amount that shoppers spent that weekend was more than $325, the group said, up 8 percent from last year.
In reality, though, the holiday shopping season began long before Black Friday. In recent months, retailers have been advertising more discounts to entice people to spend. Many experts say the earlier-than-usual deals were reflected in the October retail sales figures, when sales rose 1.3 percent from September.
“It’s certainly a different story than the October numbers,” Mr. Kramer said of the November figures.
“The ability to spend is impacted by inflation and they’re trying to change that mix in their basket to make up the difference between what they earn and take home every month and what things cost,” said Matt Shay, N.R.F.’s president and chief executive officer.
Mr. Shay noted that spending has been supported by a strong labor market, rising wages and “some households increasingly taking on additional debt or tapping into savings to help meet those monthly expense increase.”
Still there is a question for what demand will look like in December. Since retailers used sales to entice shoppers to start their holiday spending while many of them were still carrying Halloween merchandise, consumers may be less inclined to spend in the weeks leading up to Christmas.
“I think it’s still going to be a solid year,” Mr. Kramer said. “I do think the consumers will be out but there’s only so much budget to go around and there won’t be these huge jumps like we saw last year.”