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US retail sales totaled $504.4 billion in January 2019, according to a report from the US Census Bureau. This is up .2% from last December’s performance and 2.3% year-over-year (YoY).
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These improvements are particularly important following retail’s poor performance in December 2018 — when it had the biggest drop on a month-to-month basis since 2009 — as they indicate that the industry may avoid a prolonged slide.
A number of retail segments recovered, with e-commerce coming in as one of the top performers. After growing only 2% YoY in December, nonstore retailers’ sales, which includes e-commerce, rose 7.3% YoY, giving it the second highest YoY growth in January behind building material’s 8.7% YoY jump.
Other segments like food and beverage stores, health and personal care stores, and the group including sporting goods stores saw higher annual sales growth in January than in December. Having a number of areas perform well could mean that retail as a whole is trending in the right direction, but segments including furniture and apparel and clothing accessory stores saw worse YoY growth in January than they did in December, so there’s still reason for concern.
A revision of December’s performance suggests that its sales growth was worse than originally thought, making January’s results that much more important.The US Census Bureau originally reported that December’s sales saw a 1.2% drop from November and a 2.3% increase YoY, but its newly released report puts December’s month-to-month sales growth at -1.6% and its YoY growth at just 1.6%.
This means that retailers may be hurting more than originally thought, especially those that rely on holiday sales to bolster their full-year performances.
January could be the beginning of a positive trend in US retail in 2019 — something it desperately needs since it’s off to a rough start.Retailers have already announced plans to close over 4,300 stores in 2019. Meanwhile, the year kicked off with the government shutdown and the US-China trade war is ongoing — and both impact retail’s performance.
If January is the first of many months of improved sales and consumer spending, retailers may be able to weather these issues, but if not, store closures, retail bankruptcies, and other issues could pile up throughout 2019.
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Source: Business Insider – dkeyes@businessinsider.com (Daniel Keyes)