US retail sales saw slower-than-expected growth during the recent holiday season amid inflation and high interest rates, according to the National Retail Federation (NRF).
Consumers shelled out $936.3 billion over the November-to-December period, a 5.3% increase compared with 2021, the NRF, which bases its numbers on figures from the US Census Bureau, said Wednesday. That total was lower than the federation’s initial prediction of a 6% to 8% rise to between $942.6 billion and $960.4 billion.
“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 NRF chief economist Jack Kleinhenz. “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.”
Although the holidays were weaker than anticipated, sales for the full year climbed 7% to $4.9 trillion, meeting the NRF’s forecast of 6% to 8% growth, the federation noted.
Online sales grew 9.5% to $261.6 billion during the November-to-December period, according to government data. That was below the NRF’s predicted 10% to 12% surge to between $262.8 billion and $267.6 billion.
December sales improved 6% year on year but slipped 1.1% from November, according to the US Census Bureau data. The slowdown came as many consumers began shopping earlier than usual this year amid fears of further price hikes. Meanwhile, Mastercard SpendingPulse reported sales for the final month of the year rose 7.4% over the same period of 2021, with e-commerce gaining 9.7% and in-store purchases advancing 6.7%.
“The last two years of retail sales have been unprecedented, and no one ever thought it was sustainable,” said NRF CEO Matthew Shay. “Nonetheless, we closed out 2022 with impressive annual retail sales and a respectable holiday season despite historic levels of inflation and interest-rate hikes to cool the economy.”
Seven of the nine categories the NRF monitors saw increases over the two-month festive period. The clothing and accessories segment — which includes jewelry — rose 2.2%, the NRF reported. Sales in the furniture and home-furnishings division and in electronics and appliances both fell.
Image: People exchanging holiday gifts. (Shutterstock)