Holiday Season Shows Strong Results Despite November 0.6% Drop

December 15, 2022

November retail sales dipped from a surge of early holiday shopping the month before but still saw solid year-over-year growth that marked a strong start to the holiday season.

“Consumers continued to spend on household priorities and holiday gifts for loved ones this November despite continued inflation and rising interest rates,” NRF President and CEO Matthew Shay said. “Holiday shoppers are demonstrating resilience, and retailers are providing great products and experiences at the right price levels to help stretch household budgets. Consumers have been shifting back to in-store shopping for a more traditional holiday shopping experience, and we expect record participation for this year’s Super Saturday shopping weekend.”

“While job and wage gains and built-up pandemic-era savings supported holiday shoppers in November, shoppers were squeezed by inflation and higher interest rates,” NRF Chief Economist Jack Kleinhenz said. “This was the first leg of the official holiday season and had a large hurdle to overcome with monthly comparisons because of early shopping in October, but the consumer remains surprisingly resilient. The healthy year-over-year comparison is more important and clearly shows that the economy is not in a recession. Spending is on track to meet our expectations for a solid holiday season.”

The U.S. Census Bureau today said overall retail sales in November were down 0.6% from October but up 6.5% year over year. That compares with increases of 1.3% month over month and 8.3% year over year in October, which saw a boost from earlier-than-usual holiday shopping driven by worries that inflation will continue to increase prices.

The 0.6% drop was worse than the consensus estimate of a 0.3% drop. Weekly jobless claims went down to 211,000, a decline of 20,000 and less than market estimate for 232,000. Fed surveys from the New York and Philadelphia regions indicated contraction in manufacturing activity in December.

NRF’s calculation of retail sales – which excludes automobile dealers, gasoline stations and restaurants to focus on core retail – showed November was down 0.4% from October but up 5.6% unadjusted year over year. In October, sales were up 0.6% month over month and up 6.2% year over year.

NRF’s numbers were up 6.5% unadjusted year over year on a three-month moving average as of November, and up 7.2% year over year for the first 11 months of the year.

November accounts for the first half of the holiday season, which NRF defines as November 1 through December 31, and the results are on track with NRF’s forecast that 2022 holiday sales will grow between 6% and 8% over 2021. Even the low end of NRF’s forecast of between $942.6 billion and $960.4 billion in holiday sales would top last year’s record of $889.3 billion.

November sales were up in all but two retail categories on a yearly basis, led by grocery stores, online sales and health and personal care stores, but fell in seven out of nine categories on a monthly basis. Specifics from key sectors include:

Grocery and beverage stores were up 0.8% month over month seasonally adjusted and up 8.8% unadjusted year over year.

Online and other non-store sales were down 0.9% month over month seasonally adjusted but up 7.7% unadjusted year over year.

Health and personal care stores were up 0.7% month over month seasonally adjusted and up 4.3% unadjusted year over year.

Building materials and garden supply stores were down 2.5% month over month seasonally adjusted but up 3.7% unadjusted year over year.

Sporting goods stores were down 0.6% month over month seasonally adjusted but up 3.5% unadjusted year over year.

General merchandise stores were down 0.1% month over month seasonally adjusted but up 3.2% unadjusted year over year.

Clothing and clothing accessory stores were down 0.2% month over month seasonally adjusted but up 1.7% unadjusted year over year.

Furniture and home furnishings stores were down 2.6% month over month seasonally adjusted and down 3.3% unadjusted year over year.

Electronics and appliance stores were down 1.5% month over month seasonally adjusted and down 5.6% unadjusted year over year.