Discounts, Snowstorms, and Recession Stabilize US Retail Sales in December
Original release date: January 18, 2023
The US retail sales seem to have normalized in December with All Stores up 5.3% YOY and All stores Less Automotive, Food, Pharmacies also up 6.4% YOY.
December was expected to be a lower revenue month for retail sales. In the midst of a recession, and with deep-discounting taking place across all categories for Black Friday (more like Black Friday Month), this was not overly surprising. However, there was an unpredictable factor that also heavily affected the US retail sales along the East Coast: A terrible winter storm that shut stores, roads, and even caused numerous deaths. Though there were some heartwarming retail stories that came out of the situation (like a Target in Buffalo hosting stranded travelers in their stores), an event causing consumers to stay home and not shop inevitably affected pre-Christmas retail sales.
When looking back at 2022 as a whole, and comparing the YTD sales, it is interesting to see the categories that were the most and least successful throughout the year. The more successful being:
- Gasoline Stations – Up 29.9% YTD,
- Food Services and Drinking Places – Up 16.8% YTD, and
- Miscellaneous Store Retailers – Up 14.4% YTD.
Whereas Gasoline Stations increase is likely solely due to inflation, the other most successful categories are thanks to people returning to in-store purchasing and having events out with friends and family.
The least successful categories were those most affected by the macro-trends in 2022 like supply chain constraints and a decrease in discretionary spending:
- Electronics and Appliances Stores – Down -6.3% YTD,
- Furniture and Home Furnishings Stores – Up only 1.0% YTD, and
- Department Stores (Excluding Leased Departments) – Up a mere 1.0% YTD as well.
With a slower December, but increasing consumer confidence, 2023 stands to be an interesting year for retail. Our team just returned from the NRF Big Show in New York, which has reinvigorated our passion for innovation going into this year. Watch for our NRF wrap-up as well as blogs on the incredible innovations and thought leadership seen at NRF. As we begin to reflect on our week in New York, here is what we are thinking about:
- Who will win the great “AI in Retail” war?
- How is in-store tech best integrated for customer experience without being overwhelming?
- When will more brands make the move into branded experiences, without the ability to purchase product?
- What are the takeaways for small and medium businesses that don’t have millions to spend on innovation?
- How are YOU tracking retail trends and preparing for what’s to come?
For 2023 retail strategy support, reach out to JCWG. We have also released a signup sheet here for this year’s highly anticipated “Retail Innovations 18” book. We will also be hosting our free webinar series “Retail Trends Tuesday” throughout the month of February, so stay tuned for signups!