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Economics Gazette

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September 21, 2019

The US retail sales during the holiday season are accelerating


US retail salesThe US retailers should be happier than usual this Christmas. As a result of high consumer confidence and a stable labor market, the retail sales in the US during the holiday season grew at its fastest pace since 2011.

The sales excluding cars increased by 4.9% from November 1 to December 24, compared with an increase of 3.7% in the same period last year, according to Mastercard division, which monitors all forms of payments. The e-commerce continues to be the main driver of growth, raising by 18.1%.

The rise brings relief to all kind of retailers – from giants like Macy’s to smaller chains like Gap – which have been struggling with a difficult year with shop closures, fewer customers and chain failures, including Sports Authority, Toys ‘R’ Us and Payless Shoes.

The investors who renounced the stock of multiple retailers amid the rise of the stock market as a whole, regain interest. The shares of Macy’s and Gap, for example, jumped by 24% and 18% respectively in the last month, compared to a 3% increase in the S&P 500. Wal-Mart Stores’ stock price rose by 40% since the beginning of the year and the online giant Amazon is trading near record levels.

Unlike previous years, when the growth driver was primarily the high-income consumers, this holiday season larger part of the population spend more, boosted by rising wages and low unemployment. The consumer confidence rose to a 17-year high in November, and unemployment fell to a 17-year low in October. The personal consumption expenditure rose by 4.5% in November on an annual basis.

The sales of electronics and home appliances rose by 7.5% this season, which is the strongest increase over the past decade. The sales of home furnishings rose by 5.1% and jewelry by 5.9%, as a result of last-minute purchases.

However, there are also weaknesses that point to the challenges facing traditional retailers struggling with redirecting consumers to online commerce. The online shopping usually accounts for about 10% of US spending, but according to IHS Markit during the holiday season this year it will reach almost a fifth (20%), most of it due to Amazon expansion.

The clothing stores are most hit by changes in consumer shopping habits. Overall, clothing sales increased by 2.7%, but the ladies sector has not contributed to the increase.

In the week from Christmas to New Year, the US consumers are expected to spend 69 billion USD, or about 11% of the total, for the season.


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