Stores

Retail spending slumped in December, but grew YoY: report

Early holiday shopping played a part in the slowdown
article cover

Francis Scialabba

less than 3 min read

Retail news that keeps industry pros in the know

Retail Brew delivers the latest retail industry news and insights surrounding marketing, DTC, and e-commerce to keep leaders and decision-makers up to date.

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

Retail news that keeps industry pros in the know

Retail Brew delivers the latest retail industry news and insights surrounding marketing, DTC, and e-commerce to keep leaders and decision-makers up to date.