Just How Bad Were Last Week’s U.S. Retail Numbers?

It wasn’t the worst year for retail, but 2015 sales certainly went out on a low note.  Core retail sales—an input into GDP that excludes the impact of auto and gasoline sales, food purchases and purchases at building material and supplies dealers—fell in December by -0.3%. Expectations were for a gain of the same amount.  The report showed that six of 13 major categories fell on the month, with an outsized 1% drop in sales at general merchandise stores.  

Yes, warm weather was partially to blame, but certainly doesn’t explain the weakness in other categories, such as electronics and appliance stores, where December sales dropped by -0.2%. (Sales at “electronic shopping and mail order houses” are released with a one-month lag, but there is some evidence that aggressive Black Friday promotions have been hurting stores with a physical presence: November’s electronic sales were up 1.1% versus October, vs. 0.2% for the same period a year ago.)  On a quarterly basis, core retail sales weren’t much better.


In the context of an improving labor market—where more people are working, more people should be spending—but this hasn't been the case.

  • Wal-Mart just announced that it will be closing 154 stores in the U.S. and 269 stores globally.
  • Macy's will be closing 40 stores, and announced comp sales for November and December that fell by 5.2%.
  • Gap's December same-store sales fell by 5 %YoY, missing consensus estimates for a 3.5% decline. In June, Gap said that it would close 175 stores by early 2016 25 percent of its full-line U.S. stores.
  • Best Buy's U.S. holiday sales fell 1.2%, versus a 3.4% increase a year ago. While the retailer hasn't closed many of its stores, it may find that keeping its 1,000+ locations for physical shoppers and hubs from which to ship merchandise to online purchasers, is becoming too costly.
  • Office Depot, Walgreen and others have said they planned 2016 store closings, while Tiffany's blamed the stronger dollar on its shaky holiday sales performance, as same-store sales in the Americas fell by 8% YoY. (Tourist spending, particularly in markets like New York, was weak.)

Recent news doesn't translate well for mall-owners and smaller shopping centers anchored by a major tenant.


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Heidi Learner

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