December retail sales were strong, no matter what the clickbait headlines said
Through a special arrangement, presented here for discussion, is a summary of Steve Dennis’ recent Forbes article. Steve is President & Founder of SageBerry Consulting and a senior Forbes Contributor. He is the author of Remarkable Retail: How to Win and Keep Customers in the Age of Disruption.
The U.S. Commerce Department released its monthly retail sales report Friday morning and, within minutes, my social media feed lit up with gloom and doom takes on the alleged sorry state of shopping. Various outlets ran negative headlines suggesting sales in December had dropped precipitously. Much of the reporting focused on results coming in “below expectations.”
There is so much wrong in all of this.
As a senior executive at two Fortune 500 retailers and a consultant/analyst for 30 years, I’m hard pressed to name one person whom I respect who pays much attention to month-over-month numbers. What we focus on is the year-over-year numbers (and more recently, because of COVID, the so-called two-year stack).
Depending on which definition of retail you prefer (some exclude auto, gasoline and/or restaurant revenues), sales were up between 14 and 19 percent year-over-year — much higher than average and a record for the month.
Then there is this whole expectation thing.
I, for one, fully expected December to be lower than November — and so did most other folks in retail I talk to. Why? It’s been obvious supply chain concerns and earlier retailer promotions pulled a lot of holiday sales into October and November. Oh, there’s also a little thing called the Omicron surge.
To be sure, there are reasons for concern. Inflation, supply chain issues, labor shortages, likely higher interest rates and overall uncertainty caused by the pandemic may well dampen future growth. Yet, the affluent consumers that make up the bulk of retail spending, by and large, have excellent balance sheets, buoyed by strong stock and real estate markets and solid discretionary income.
I’m not about to predict that robust sales growth will continue. But the Chicken Little storylines that seem to infuse many media narratives are unfortunately short on both logic and facts when it comes to these reported results.
The year 2021 was both unusual and a blockbuster for most of retail. The future remains volatile, and your mileage may vary, but the idea that December’s retail numbers were weak is utter nonsense.
- December Retail Sales Were Very Strong, Despite The Misleading Headlines – Forbes
- NRF Says 2021 Holiday Sales Grew 14.1 Percent to Record $886.7 Billion – National Retail Federation
- U.S. retail sales plunge in December – Reuters
- Retail sales in U.S. declined 1.9% in December – The Denver Channel
- Retail sales fell in December, a slowdown in a robust holiday shopping season. – The New York Times
- Retail sales dropped 1.9% in December as higher prices caused consumers to curb spending – CNBC
- Warning sign for the economy: Consumers are getting grumpy – CNN Business
- U.S. Retail Spending, Manufacturing Drop as Omicron and Inflation Surge – The Wall Street Journal
DISCUSSION QUESTIONS: Did December results meet, beat or lag your expectations? What factors do you see as most important in measuring holiday results?