November’s consumer spending was buoyant, as eCommerce sales rebounded from a tepid pace in October. Chalk it up to the festive season, but there are signs that consumers are throttling back on at least some retail categories … so they can fill their online carts in anticipation of giving gifts to their loved ones (or even themselves).
To that end, the latest data from the U.S. Census Bureau released Tuesday (Dec. 17) indicated that overall retail sales surged 0.7% in November, ahead of consensus of 0.6% gains month over month and quickening from October’s newly revised 0.5% pace (up from the previous 0.4% report).
Drilling down into individual categories of spending — as the holiday shopping season was marked by Black Friday — some key areas of discretionary spending saw a boost.
While much of the overall gain can be traced to increased spending on autos and related parts, as the category was up 2.6%, the data show that sporting goods and hobby-related spending was up 0.9% month on month, and sales of electronics gathered 0.3% from October. Similarly, sales at furniture and related establishments were also up 0.3%.
And as might be expected, online spending, underpinned by promotional activity and discounts, saw a resurgence. The non-store retailer category, which includes eCommerce-related sales (but is not strictly limited to that category), was 1.8% higher month on month, where that pace had been below 1% in past readings.
As to where there was some pullback, sales at food and drinking establishments slipped 0.4% in November vs. October. Spending on clothing and apparel dipped 0.2% (the data as noted below are seasonally adjusted).
The read across here is that, since not all categories saw gains in the month, there was at least some consideration of budgeting, or possibly even “pacing” holiday spending. Individuals and families may have eschewed going out to eat in favor of having some more “dry powder” to spend online and to upgrade electronics and other leisure-focused activities and goods. Taking a breather from dining out may be a momentary lull, stuffed as we all were with several days of Thanksgiving leftovers — and holiday parties will be in full swing this month.
The selectiveness on the part of consumers is understandable. As reported earlier in the month, the Consumer Price Index (CPI) released for November indicated that two key areas of essential spending — food and shelter — were more expensive. The overall annualized inflation rate was 2.7%, which met consensus expectations, increasing from the 2.6% October pace. As measured on a monthly basis, between October and November, prices were 0.3% higher. The cost of shelter was 0.3% higher, and has surged 4.7% from a year ago. Overall, food costs were 0.4% higher. But that category’s overall trend was outpaced by the prices paid for food at home (i.e., groceries), which were 0.5% higher in November.
To help offset some of those pressures, and to stretch out spending, PYMNTS Intelligence and Splitit found that overall, 28% of holiday shoppers say they are highly likely to use pay-later plans for their holiday shopping.
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