Christmas Retail Sales Spike for Some, But Not Fashion
Retail ended 2020 with the glass half full, half empty or just shattered on the floor — as was the case for the many retailers that went bankrupt or just closed down and sales associates who lost jobs amid the pandemic.
The official read from the Census Bureau showed that U.S. retail sales grew 3.5 percent last year despite the pandemic and that year-over-year results for December increased 6.3 percent with the Christmas rush.
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But the line between the industry’s haves and the have-nots has never been starker.
For fashion’s brick-and-mortar retailers, the holiday was a season of pain. When growth could be found, it came from the web, where orders are particularly susceptible to profit margin-sapping returns.
December sales inside apparel and accessories specialty stores fell 16 percent from a year earlier, while department stores were down 21.4 percent.
The winners were online and in other sectors. Nonstore retailers pushed December sales up 19.2 percent from a year earlier, while building and garden supply stores were up 17 percent and sporting goods, hobby and musical instrument stores gained 15.2 percent.
While that all together paints a picture of a consumer who is able to spend despite it all, the seasonally adjusted month-to-month readings showed retail declines in both December or November.
But retailers are nothing if not optimists.
Nordstrom Inc.’s sales from Halloween through New Year’s fell about 22 percent, prompting chief executive officer Erik Nordstrom to look for silver linings.
“We’re encouraged by the increasing momentum throughout and following the holiday season as we continue to unlock new ways to better serve customers on their terms with greater convenience and connection,” Nordstrom said. “By leveraging order pickup and store fulfillment capabilities across our two brands of Nordstrom and Nordstrom Rack, we’re seeing benefits to our customers as well as to our business.”
Forecaster Craig Johnson, president of Customer Growth Partners, pegged combined November and December sales growth at 8.6 percent and said: “Certainly, households without jobs struggled, but our field team saw solid momentum across the income spectrum, and both at deep-value and luxury venues.
“The key question is how far holiday’s stellar growth will shine deeper into the new year, with the remarkably sound household fundamentals facing off against COVID-19 and employment growth fears,” Johnson said. “If employment growth lags, retail sales growth may ease to about 3.5 percent; but if employment accelerates, we may well see solid 4.5 percent to 5 percent year-over-year well into 2022.”
Hopes are running high for the $1.9 trillion stimulus push by President-elect Joseph Biden that is intended to pump more money into struggling households and speed the rollout of the vaccine for COVID-19.
Matthew Shay, president and CEO of the National Retail Federation, said the industry showed “incredible resilience this holiday season.”
“Faced with rising transmission of the virus, state restrictions on retailers and heightened political and economic uncertainty, consumers chose to spend on gifts that lifted the spirits of their families and friends and provided a sense of normalcy given the challenging year,” Shay said. “We believe President-elect Biden’s stimulus proposal, with direct payments to families and individuals, further aid for small businesses and tools to keep businesses open, will keep the economy growing.”
Jack Kleinhenz, the NRF’s chief economist, added that: “Consumers were able to splurge on holiday gifts because of increased money in their bank accounts from the stimulus payments they received earlier in the year and the money they saved by not traveling, dining out or attending entertainment events.”
The NRF pegged sales growth for the November-December holiday season at 8.3 percent, more than double the 3.5 percent average over the previous five years.
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