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After four consecutive months of growth, retail sales slumped in December, falling a seasonally adjusted 1.9% from November to $626.8 billion, the Commerce Department reported on Friday. But it’s not all bad news—December sales rose 16.9% YoY, with Americans spending $103.6 billion more last month than they did in December 2020.
- Total sales for 2021 also saw a notable boost from last year, rising 19.3%. Plus, from October to December 2021, sales increased 17.1%.
After a tough go in December 2020, restaurants and bars saw the largest YoY boost, with sales up 41.3%, though the segment did see a 0.8% dip from November to December 2021.
- Gas stations notched 41% YoY growth, with a 0.7% decrease for the month.
- Clothing and accessories stores secured a 29.5% YoY jump, but saw a 3.1% drop from November to December last year.
- Food and beverage saw a smaller growth (+8.4%) over December 2020, while sales decreased 0.5% since November 2021.
Buying in: Neil Saunders, managing director of GlobalData, noted on Friday that consumers’ earlier holiday shopping in 2021 played a part in December’s slowdown.
Higher prices contributed to the YoY sales bump (inflation rose at its highest level in nearly 40 years last month, up 7% YoY), though volume was up, as shoppers continued to “spend relatively freely,” Saunders said. GlobalData found that shoppers were “absolutely determined to enjoy themselves” after 2020’s less-than-stellar holiday season.
Looking ahead…The YoY sales boost showed a significant recovery from the beginning of the pandemic. Saunders predicts that 2022’s growth rates won’t be as dramatic—some consumers are already demonstrating money-saving tactics like buying value-priced items—but he doesn’t think they will be “disastrous” either.
“It is a step change from where we have been in the past 18 months, which is best characterized as a rapidly rising tide of spending that has floated most retail boats. If that starts to ebb, the weaker retailers will quickly become exposed," he said.—EC