Retailers were unhappy to see sales growth slow to only 0.3% growth in November. That’s a far cry from October’s growth of 1.8%.
There are many reasons sales growth is slowing, including summer fears of shortages that led many shoppers to buy early, and stimulus measures that have driven prices for food and gasoline higher, taking away dollars that may have been earmarked for Christmas presents. After months of politicians telling shoppers to “shop early,” to avoid shortages, shoppers may simply be done shopping for the season.
Gabriel T. Rubin reports in The Wall Street Journal:
“If you look at the weakness in November sales, it looks more related to holiday shopping,” said Aditya Bhave, an economist for Bank of America. “Some of that is going to be a reflection of prices, but the bigger story here is the change in the seasonal pattern,” with consumers shopping earlier for holiday gifts than in usual years.
Wednesday’s report showed sales at electronics stores down 4.6% in November from the previous month, while sales at general merchandise stores were down 1.2%. Spending at nonstore retailers, including online sellers, was flat last month.
Stores that sell sporting goods, musical instruments and books saw sales increase by 1.3% in November, the same as the increase at food and beverage stores. Sales at gas stations were up 1.7% last month and are up 52% from a year earlier, in part reflecting higher prices at the pump.
Higher spending on groceries and gasoline could be limiting sales elsewhere. Inflation can be a “double-whammy” for lower-income consumers, who tend to spend a larger percentage of their incomes than higher-income households and tend to spend more on categories with the most price volatility, like food and energy, Mr. Bhave said.
Since retail sales figures aren’t adjusted for inflation, higher prices contribute to some of the growth. But other factors, like a persistent savings glut for many consumers since the worst of the pandemic, are also fueling growth. That can contribute to a continued cycle of rising prices, given that companies feel confident that customers will be willing to pay them.
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