Retailers Heading into 2014 with Momentum
"Thank you...thank you very much."—Elvis Presley
Back in mid-December 2013, retailers appeared to be channeling Elvis Presley and the holiday song he popularized, "Blue Christmas," when preliminary holiday retail sales were somewhat disappointing. Well, y'all: Elvis has left the building! Compliments of heavy discounts, promotions, and last-minute deals, retailers ended the year with positive growth. Thank you...thank you very much.
According to the National Retail Federation, total retail sales increased 3.8 percent year over year, and nonstore sales (online and e-commerce sales) grew 9.3 percent.
The shopper—and her behavior—is interesting to follow. So why did I just refer to the shopper as "her"? Ask any retailer, you'll find that most shoppers are female. And in 2013, volatility seemed to be her middle name as her purchases fluctuated considerably. So let's take a look at her shopping behavior in core retail sales, which is a statistic that removes automobile sales, gasoline, and building materials. Core sales ended 2013 with the highest results since before the recession, in 2006 (see the chart).
Retailers did end the year on a positive note, even with the deep discounts and promotions. As I once heard a colleague say when describing data movement, "Anything above zero is good; below zero, bad."
So how is our shopper feeling in the wake of this past holiday season? According to the Conference Board's consumer confidence index, the consumer reported two consecutive months of strong confidence: In December, the index posted 77.5 points (revised), and in January, the index stood at 80.7 points. The Conference Board's present situation index and its expectations index presented further evidence in January that the consumer is feeling a bit better. The present situation index rose to 79.1 from 75.3, and the expectations index rose to 81.8 from 79.0 points.
We'll check in with shoppers next after Valentine's Day, when we assess that holiday's sales. So where will Cupid's arrow land? We'll know sometime in March. Until then, happy shopping!
By Christine Viets, a Regional Economic Information Network analyst in the Jacksonville Branch of the Atlanta Fed
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