The retail sector finally delivered some good news: January sales at U.S. stores grew by more than industry analysts expected.
Even better still was the news that apparel specialty stores had their best month in almost 2 years.
The U.S. Census Bureau’s advance monthly report released today reported that retail sales, which include gasoline, groceries and automobiles, totaled $472 billion in January—an impressive 5.6% increase over December 2015’s $470 billion, and .4% higher than last month (vs. an expected .1% increase).
On a 12-month smoothed basis, retail sales rose by 6.2%, the biggest increase in the measure in almost 3 years.
The biggest driver of sales growth in December was in the automobile sector, where sales grew by more than 8 percent on a 12-month smoothed basis.
Clothing and accessories specialty stores finally managed to turn in a good month, with sales up 2.5% year-over-year to $21.4 billion, or more than 3 percent on a 12-month smoothed basis.
However, department, chain and discount stores saw their sales tumble again – this month by 7.4% to $12.7 billion. Rumors are swirling about the imminent demise of Sears, and even that Macy’s might be seeking to be acquired.
The combined department, chain and specialty channels—what we call the apparel-oriented stores given their huge share of the market—dropped by 1.4% to $34.4 billion, which translated to a .7% increase on a 12-month smoothed basis, their best showing in 22 months.
Sales at non-store retail, which includes pure-play e-commerce, increased by almost 12% in January to over $49 billion, driven by continued gains by Amazon.
The total retail inventory-to-sales ratio fell to its lowest point in almost a year and a half, but rose slightly for department, chain, discount and apparel stores in December, the most recent month for which the data are available, no doubt due to sluggish holiday sales that left these stores with excess merchandise.