NRF: November retail sales give holiday season solid start

November retail sales dipped from the month before but still showed the sixth consecutive monthly year-over-year gain by government calculations and set the stage for a healthy holiday shopping season compared with last year despite the pandemic, the National Retail Federation (NRF) reported.

“Consumers held back on spending in November as virus rates spiked, states imposed retail restrictions and congressional stimulus discussions were gridlocked,” said Matthew Shay, president and CEO, NRF. “While consumers have been bolstered by increases in disposable income and savings, it’s clear that additional fiscal stimulus from Congress is needed and we are hopeful it will be passed soon as we enter the final stretch of the holiday season. With retail sales up 8.8 percent versus November 2019, we still expect a strong holiday season compared with last year.”

“The month-over-month decline isn’t surprising because some spending was pulled forward into October by campaigns encouraging consumers to shop early and shop safe,” said NRF Chief Economist Jack Kleinhenz. “Despite that, as we go into the final weeks of 2020, year-over-year trends show spending is holding up well regardless of month-to-month fluctuations. Nonetheless, we have to remember the remainder of the holiday season depends critically on the virus. We are optimistic, but spending could shift into a lower gear if the virus continues to spread.”

The U.S. Census Bureau said overall retail sales in November were down 1.1 percent seasonally adjusted from October but up 4.1 percent year-over-year. That compares with a monthly drop of 0.1 percent but a yearly gain of 5.5 percent in October.

NRF’s calculation of retail sales – which excludes automobile dealers, gasoline stations and restaurants to focus on core retail – showed November was down 0.3 percent seasonally adjusted from October but up 8.8 percent unadjusted year-over-year. That compared with a decrease of 0.1 percent month-over-month and an increase of 10.5 percent year-over-year in October. NRF’s numbers were up 10.8 percent unadjusted year-over-year on a three-month moving average.

Monthly numbers fluctuate even when adjusted for seasonal variations, making year-over-year comparisons a better indication of long-term trends. On a year-over-year basis, retail sales have increased each month since May under NRF’s calculation and since June under the Census Bureau calculation. Retail sales during the first 11 months of the year were up 6.6 percent, according to NRF’s calculation.

NRF has forecast that holiday sales will increase between 3.6 percent and 5.2 percent over 2019 to a total between $755.3 billion and $766.7 billion. While NRF defines the holiday season as November 1 through December 31, NRF research shows 42 percent of consumers started holiday shopping sooner than usual this year after NRF urged the public to shop safe and shop early. On average, consumers had about half their holiday shopping left to do as of Thanksgiving weekend.