U.S. consumers kept spending to close out 2023, leading to healthy sales in December.
Nonstore sales, which are mainly online, increased by 7.0% year over year in December. That’s according to the advanced estimate in the December monthly retail sales report from the U.S. Commerce Department. Total retail sales, including both in-store and online, grew 3.1% year over year. Those figures are not adjusted for inflation or seasonality.
Nonstore sales also grew 8.4% in Q4 2023 and 8.0% for the whole year, down from 12.8% growth in 2022.
The ecommerce addressable portion of total retail sales, excluding restaurants, fuel, and automobiles, grew 3.9% in 2023, according to Digital Commerce 360’s analysis of Commerce Department data.
Online sales contribute to December spending
Nonstore sales grew again in December, although not as quickly as they did in November. In November and December combined, nonstore sales increased 8.2%. That was bolstered by a strong holiday season. U.S. online holiday spending reached $221.1 billion in 2023, according to Adobe Analytics. The majority of that spending happened in November, which included the Cyber 5 period. But the remaining $98.6 billion in U.S. online sales were recorded in December. Retailer sales that continued past Cyber Monday drove some of that December spending, Adobe says. Online spending for the holiday season, including November and December, grew 4.9% year over year, Adobe said.
“Retail sales were stronger than expected in December,” said Ted Rossman, senior industry analyst at Bankrate, in a research note. “Bars and restaurants, health and personal care stores, electronics and appliance stores and motor vehicle and parts dealers all notched double-digit year-over-year gains,” he said. Gas stations, furniture stores, department stores, and building material stores were the only notable weak spots, he added.
Weak sales at furniture and home improvement stores have become the norm in recent quarters as consumers experience a weak housing market and postpone moving, hurting demand in the category.
The National Retail Federation responds
December results show a promising end to the year, according to the organization.
“Consumer spending was remarkably resilient throughout 2023 and finished the year with a solid pace for the holiday season,” National Retail Federation (NRF) chief economist Jack Kleinhenz said in a statement. “Although inflation has been the biggest concern for households, the price of goods eased notably and was helped by a healthy labor market, underscoring a successful holiday season for retailers.”
The NRF also put out its own December sales estimate, the CNBC/NRF Retail Monitor using credit card data from Affinity. The report found that online and nonstore sales grew 31.17% year over year in December. It also found total retail sales grew 5.32% over the same period.
Other holiday spending in 2023
“Consumer spending was remarkably strong during the holidays, continuing a year-long trend,” Rossman said.
Total holiday results, from Nov. 1 to Dec. 31, largely mirrored December results. Electronics and appliances stores saw the largest gain, up 9.3% over both months compared to 2022. Health and personal care store sales also grew, up 9.0%.
Those two categories, alongside nonstore sales, recorded the widest growth by far. The next category by growth was apparel stores, with sales up 3%.
The Commerce Department reports overall retail sales, including nonstore sales, every month. It reports retail ecommerce sales quarterly, with the fourth-quarter ecommerce report due out Feb. 20.
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