Retail sales dip, government says, although some differ
One groups says sales declined, another claims a modest increase in line with predictions, and sill another anoints the season a positive surprise and declares the economic recovery has begun. Who's right?
All of them actually.
Numbers are a tricky business. Just about any study or statistic can be rigged to provide a certain answer. Companies do it all the time to get us to buy products. Data gathering agencies don't always include the same items, hence the different results. This is what happened with retail sales at the tail end of 2009.
The Commerce Department says retail sales declined .03% in December. Cue confused analysts and business writers. How, everyone is wondering, did sales decline for the second year in a row? Especially when stores issuing fairly positive statements about last-minute buying, strong inventory management and fewer markdowns on merchandise?
Because the federal numbers include big ticket items like cars and appliances. Neither are exactly traditional gift items.
The automotive industry faces its own unique set of challenges and outside of Sears and Best Buy, not a lot of national retail chains sell appliances. Both of these product categories rely heavily on financing for consumers to actually make a purchase, and with lending getting tighter, it makes sense that these two areas will find it harder to grow sales.
But the broader retail industry actually saw sales increases. The National Retail Federation says preliminary 2009 holiday sales (November and December combined), rose 1.1% to $446.8 billion, surpassing NRF's projected decline of 1.0%.
And the International Council of Shopping Centers was even more positive, saying that sales were higher than the 1% it had predicted and sales at stores open at least a year, seen as a truer measure of a retailer's profitability, rose closer to 2% in November and December combined.
And at the NRF's annual event in New York this week, retail executives are saying that 2010 will be much better than last year, in spite of continued high unemployment.
Still confused? Here's the bottom line: Sales across all product categories nationally declined compared to 2008. Take cars and appliances out of the mix, and sales actually improved between 1-2%, depending on the source.
And here's something you won't get from the data: not all retailers are breathing a sigh of relief. Apparel, electronics and home goods are having a healthy new year, as are value oriented retailers like Costco and TJX Cos.
But chains in weaker or in-transition product categories like footwear retailers and home video stores will continue to suffer. You heard it here.