Wednesday, December 27, 2017

Holiday Sales; Blowout or Blowoff?

From the always reliable USA Today:

Despite thousands of store closings this year, Americans supplied a final flurry of spending to give retailers their best holiday season sales since 2011, figures released Tuesday show.
U.S. year-end holiday retail sales rose 4.9% compared to the same period last year, a welcome gift to U.S. retailers amid new signs of consumer confidence.
File photo shows last-minute Christmas shoppers at The Grove, a retail shopping complex in Los Angeles on Sunday, Dec. 24, 2017.
Richard Vogel, AP
Online retail shopping similarly increased 18.1%, while overall consumer buying during the holiday period set a record for dollars spent, according to the sales report issued by Mastercard SpendingPulse.
"Overall, this year was a big win for retail," Sarah Quinlan, senior vice president of Market Insights, Mastercard, said in a statement issued with the report. "The strong U.S. economy was a contributing factor, but we also have to recognize that retailers who tried new strategies to engage holiday shoppers were the beneficiaries of this sales increase."
Although the report showed the 2017 holiday shopping season from Nov. 1 to Dec. 24 was a winner for all retailers, the results differed by category. Retailers that succeeded tapped into:
  • Home goods. There was no place like home for the holidays for many shoppers, who sent sales of electronics and appliances up 7.5%, the strongest growth of the last 10 year. Sales of home furniture and furnishings separately grew 5.1%.
  • Heavy early-season promotions. They worked, with the first three weeks of November delivering significant sales increases.
  • Last-minute shopping. The spending spree lasted late into the holiday season, making last Saturday second only to the post-Thanksgiving Black Friday in terms of single-day spending. Jewelry sales rose 5.9%, largely driven by last-minute sales.
The findings were based on aggregate sales activity in the Mastercard payments network, along with survey based-estimates for other forms of payment, including cash and checks, Mastercard said. The data exclude auto sales.
-----

 As sm-refugee asked in the previous comments.  Are the sales figures fake news or the just released consumer confidence numbers a big lie? 
The headline index fell to 122.1, making for a much steeper drop than economists had forecast. They were expecting a fall to 128.0 from November's 128.6, according to Bloomberg.
Consumers were more positive about present conditions but were mixed on the state of the labor market.
The percentage of those who said business conditions were "good" increased to 35.2% from 35%, while those saying business conditions were "bad" slipped to 12.1% from 12.3%.
People claiming jobs were "plentiful" fell to 35.7% from 37.5%, while those claiming jobs were "hard to get" hit a 16-year low of 15.2%, down from 16.8%.
"Consumer confidence retreated in December after reaching a 17-year high in November," said Lynn Franco, the director of economic indicators at The Conference Board. "The decline in confidence was fueled by a somewhat less optimistic outlook for business and job prospects in the coming months. Consumers' assessment of current conditions, however, improved moderately.
 My take is a little of both and a helping of tax uncertainty. 
• Sales; I think it likely the surveys are capturing more than ever with big data.  I also think people are spending bigger when it means smarter.  In the great Recession you didn't buy 6 months of toilet paper ar Costco even if it was by far the best deal.  
• Confidence; Last month was a big number.  a drop is expected.  It dropped a bit more than that but nothing near a trend break. 
• Taxes; No doubt many of the surveys were in the middle of the tax debate.  Uncertainty yields caution. 

What does everyone else think? 

28 comments:

Cinco-X said...

I think we've done well for the entire year including the holiday season

Lawyerliz said...

Me too. Big new space related stuff with good salaries are opening. A couple new devopments on the North part of the county are being built to the Nimbys dismay. Lots of strip malls doing poorly. But unemployment in this county is only 3.5%, which I think is damned good. Contractors we rre incredibly busy before the store. Not they are one or 2 steps up. Things look ok, except for signs and a few roof, but I think the are a lot that need replacing that are not obvious.

Lawyerliz said...

Were,now, roofs, there

Lawyerliz said...

Is Cali going to rebuild?

LBD said...

Here not so good. UE down because young people leave. Mall continues to die, this years big one was JC Penny. Rents down, I personally continue to have one empty constantly. FICO scores are in the dumpster. UP is back hiring after the war on coal is ending but again young can't pass a drug test or left town. CD rates still killing the elderly and savers in general. People buying on credit is generally not a sign of good health. Me I got plenty of popcorn and laughing away. IMO.

Lawyerliz said...

A new baby eaglet hatched. Very cute. And another egg. Being live streamed.

Lawyerliz said...

You don't build moderately priced Housing that's what happens.

sm_landlord said...

More on Retail:

https://www.reuters.com/article/us-usa-holidayshopping/u-s-holiday-sales-set-to-break-records-in-surprise-boon-to-retail-idUSKBN1EK1BG?il=0

Unless all of the sales data is somehow fake, this is a record-breaking retail performance. So the con-con numbers have to be wrong.

[Insert disclaimer here about using national statistics to infer anything in particular markets]

Lawyerliz said...

Going down to 61°!!!

Lawyerliz said...

All the restaurants were very busy. The mall, not so much. Hardly any staff. If they've given up, why not shut down?

Lawyerliz said...

59°!!

Rob Dawg said...

Short sleeves and shorts for sundown golf. Fun.

Cinco-X said...

My wife told me that Solomon Pond Mall in Marlborough, ma is about to go under. Basically no traffic, and large numbers of stores are going under. That doesn't include the fact that they have a Sears and a Macy's as anchors

TJandTheBear said...

C'mon, Liz, you know the U-3 numbers are beyond bogus, otherwise there would be insane pressure on wages. This is a different economy than traditional indicators were meant to measure.

I think retail is much like the market -- the spoils are going to a select few, with an out-sized share purchased on margin.

Rob Dawg said...

Let’s see the spike in consumer debt outstanding in January before we call these purchases “sales.”

Lawyerliz said...

We charge every thing and then pay it off the following month. Convenient. We basically almost never pay interest to anybody.

I don't know about elsewhere, but I believe the 3.5% here. Space industry booming, tourists escaping hideous weather. New developments, restaurants full. Contractors and roofers busy out of their minds--which they were before the storm. Yeah, many kinds od stores have become obsolete, but Home depo is always swamped. We don't buy books at stores too much anymore, why, when I can download them, with some taps of the finger?

Lawyerliz said...

I forgot, there are help wanted signs, and only one beggar at our usual driving routes.

Lawyerliz said...

Our roofer admits they all poach each other's men, that's got to include a raise, perhaps under the table.

Lawyerliz said...

House prices are somewhat high but not in the league of really expensive places, like Cali or New York. Our children are not chased away. Which is not to say we don't have any problems.

Lawyerliz said...

Off to breakfast and office depot.

Cinco-X said...

The macros are gamed. I suspect that if you backed out the increases in health care costs and tuition increases, economic growth has either been flat or possibly decreased over the past 25 years. Basically since Clinton sold out the country to China for campaign donations.

Cinco-X said...

Wow...9:30AM, and it's still -3°F

Lawyerliz said...

Boston daughter is at -12. Feels like. . . --40°!!

Lawyerliz said...

Now --11

LBD said...

Good Morning!

19F high of 30F today and tomorrow, then back down into the deep freeze and maybe more snow. At least it's water that is badly needed. :)

Cinco-X said...

BlackhaloPig Pen • 1h
ATM no one but bots and Yogi are banned.

For Rob

Rob Dawg said...

New post. Feel free to burn all previous posts if you need to keep warm. ;)

Rob Dawg said...

Thx Cinco.