Retail Sales Fall in December But Rise in Grocery, Sporting Goods and Building Materials
- Retail sales fell 1.1% in December compared to November, according to the U.S. Census Bureau.
- Sales during the holiday season were slower than anticipated, especially since sales and promotions began earlier last year.
- Sales rose in a few categories — grocery, sporting goods and building materials.
Overall retail sales fell in December, though they rose slightly in a few key categories, including grocery, sporting goods and building materials.
According to the U.S. Census Bureau’s Advance Monthly Sales for Retail and Food Services Report, released Jan. 18, retail sales in December declined by 1.1%. They were 6% higher than they were in December 2021, per the data. The data from the U.S. government does not account for the record inflation impact on consumers, which continues to play a role despite it slowing from a peak last summer.
Overall, unadjusted sales increased 9.2% in 2022 compared to the year before. The numbers represent disappointment among analysts as the holiday shopping season came to a close since the holiday shopping season last year was prolonged. Retailers started earlier than ever offering deals and discounts in October to clear out stockpiles of inventory.
The decline in December was the largest decline in sales seen all year since the same month in 2021. Other factors, like cold temperatures also likely contributed to lower sales for retail and restaurants, while lower gas prices provided relief to consumers but also contributed to declining sales in that category.
Grocery stores were basically flat compared to November (up 0.1%), but saw a larger 8.3% increase compared to December last year. One of the largest declines compared to November was in the department store category, which saw a 6.6% decline over November. Furniture and home furnishing stores saw a 2.5% decrease, while auto dealerships saw a 1.4% fall from the prior month.
Overall, the National Retail Federation (NRF) said retail sales during the holiday season grew 5.3% compared to last year, which was less than the organization had anticipated. NRF attributed the slower-than-anticipated growth to inflation pressures and high-interest rates.
“We knew it could be touch-and-go for final holiday sales given early shopping in October that likely pulled some sales forward plus price pressures and cold, stormy weather,” said Jack Kleinhenz, chief economist at the NRF, in a release. “The pace of spending was choppy, and consumers may have pulled back more than we had hoped, but these numbers show that they navigated a challenging, inflation-driven environment reasonably well. The bottom line is that consumers are still engaged and shopping despite everything happening around them.”