Retail trade sales last month were up 0.3% from November and rose 5.6% from December 2016, the U.S. Department of Commerce said on Friday. Overall retail sales (including autos and food) rose 4.2% last year, the most in three years, the government said.
The federal government also revised its November estimates upward to 0.9% growth over October, from 0.8%. December e-commerce sales rose 1.2% from November and 12.7% from December 2016, according to the report.
Looking at specific categories, December sales and overall 2017 retail sales were a mixed bag. Apparel and accessories sales fell 0.3% from November but annual sales in the category rose 2.4% year over year in 2017, while sporting goods sales fell 1.6% from November and 0.1% year over year. General merchandise sales rose 0.1% from November and were up 4.4% for 2017, and department store sales fell 1.1% from November and rose 0.5% year over year.
By the time the Commerce Department released its report Friday, various retailers had issued holiday results, so the signs of retail health in the government’s number-crunching didn't come as much of a surprise.
For example, after warning of a tough holiday Target reported that same-store sales in November and December grew 3.4%, Nordstrom said that net sales rose 2.5% and same-store sales rose 1.2% in that period, and teen apparel retailer American Eagle beat forecasts with a same-store holiday sales rise of 8%.
Surprise or not, the raw numbers demonstrate "that the dire predictions of the demise of retail are premature," Moody’s Vice President Mickey Chadha said in comments emailed to Retail Dive. "Consumers are still buying but where they are buying, and how they are buying is changing and will continue to evolve as price transparency increases and e-commerce and brick-and-mortar operations of retailers continue to converge into one seamless consumer experience," he said.
Consumer confidence is at 17-year highs, equity markets are in record territory, housing continues to post steady gains and wage growth has been steadily around 3% [or more], according to a note from Retail Metrics President Ken Perkins emailed to Retail Dive.
As a result, certain retail segments were particularly strong in December. Home and furniture stores saw 7.5% year-over-year growth, thanks in part to a robust housing market, as well as more gifting of home products, according to GlobalData Retail Managing Director Neil Saunders. "Our consumer data showed that small home-related items like decor and accessories were one of the most popular gifting categories this holiday season."
Electronics sales, which had been relatively flat for most last year, "ended the year with a flourish," he also noted.
The confidence will likely continue into this year, especially as shoppers look to spend year-end bonuses and any windfall from tax changes, Saunders said. "Growth may drop back from holiday levels but will remain above average," he said.
But the health — and wealth — isn’t being felt across the board. "General merchandise sales (without food or autos) barely moved up, and most of the increase was in non-store retailing," Erik Gordon, professor at the University of Michigan’s Ross School of Business, told Retail Dive in an email. "It gives little comfort to store-based retailers or their investors."