Retail sales growth plunged in December, stunning industry economists and others who were expecting low gas prices and the recovering job market to spur consumer spending in the closing weeks of the 2014 holiday season.
Apparel specialty stores managed to turn in better-than-average growth in the month, however, an indication that clothing and accessories remain popular gift items.
According to data released Thursday morning by the U.S. Department of Commerce, total retail sales edged up by only 3.2% in the month to $442.9 billion. On a 12-month smoothed basis, the increase was 2.2%, their lowest rise in 11 months. Once again, strong auto sales were responsible for most of the gains. Retail sales excluding autos were up by less than 1 percent on a 12-month smoothed basis.
Total retail inventory increased by 1.7% in November, the most recent month available, resulting in a slightly lower inventory-to-sales ratio for the month.
Sales at department, chains and discount stores actually fell by almost 1 percent—not surprising given the feverish pace of promotions that failed to reverse declines in foot traffic at big stores last month.
Specialty retail store sales picked up nicely in December, however, by 4.9% in the month, helping the combined department and specialty store channels to see a 2.5% increase.
E-commerce, which is growing faster than bricks-and-mortar retailing, didn’t quite compensate for the mall no-shows. Although non-store retailing enjoyed a 5.7% sales increase in December, the increase was the lowest increase in 15 months. However, restaurants had a great month, with sales up by 9.4% on a 12-month smoothed basis.
For the calendar year, total retail sales rose by an adjusted 3.9% in 2014 (2.9% excluding autos), their lowest annual gain in the past five years. Department store sales dropped by almost 1 percent, while specialty apparel stores saw sales rise by 4.5% for the year.