Retail Sales Hold Steady Ahead of Holiday Season
Consumers appeared cautious as retail and food service sales rose a modest 0.3 percent in October, according to the Commerce Department.
By Sindhu Sundar on November 15, 2019
Retail is eagerly anticipating the holiday boost, even as consumers are showing caution.
October retail and food services sales in the U.S. rose by 0.3 percent from September, according to the U.S. Census Bureau. The agency’s monthly report came ahead of a holiday season in which retailers anticipate better performance than in previous years.
Total sales for the month amounted to $526.5 billion, a roughly 3.1 percent increase from last year.
Apparel and accessories stores sales declined 1 percent in October from the previous month, and fell 2.7 percent from a year earlier. Department store sales remained almost stagnant in October, notching just a 0.1 percent increase from the previous month, though they plummeted by 6.9 percent from a year earlier.
Even with the declines, the retail industry is trying to stay upbeat.
“Despite the gradual slowdown in the U.S. economy, consumers are in a good place and October’s retail sales are a step forward into the all-important holiday season,” said Jack Kleinhenz, the National Retail Federation’s chief economist.
The NRF and consumer data company Prosper Insights & Analytics also released their own survey Friday on Thanksgiving shopping, which projected some 165.3 million consumers would shop during the five days from Thanksgiving through Cyber Monday. Those findings are part of NRF’s annual November holiday survey of nearly 8,000 consumers.
“We expect the biggest increase in potential shoppers for Thanksgiving Day this year,” said Phil Rist, executive vice president of strategy at Prosper Insights. “We anticipate that people may head to stores if they are open or shop from their phones while watching football.”
In its holiday forecast last month, the NRF said it expects retail sales in November and December to increase 3.8 percent to 4.2 percent compared with a year earlier, to a total of up to $730.7 billion.
The problem for brick and mortar retailers is that much of that growth will go to online players, which logged a year-over-year sales increase of 14.3 percent in October.
Retail continues to feel jitters amid the Trump administration’s ever-evolving tariffs and responses from trade counterparts, as the U.S. still spars with China over tariffs on apparel and footwear. In August, Trump proclaimed by tweet that the U.S. tariffs on $300 billion in Chinese goods, which would start on Sept. 1, would be increased to 15 percent from 10 percent. The tariffs on some Chinese imports are expected to go into effect from Dec. 15, though that could change depending on whether the U.S. and China reach any agreement.
“Uncertainty around trade policy has impacted consumer sentiment recently but ongoing job growth, low interest rates, low inflation and the stock market hitting record highs provide support for consumer spending,” the NRF’s Kleinhenz said.