October retail sales numbers saw sequential declines and annual gains, according to data respectively issued yesterday by the U.S. Department of Commerce’s Census Bureau and the National Retail Federation (NRF).
Commerce reported that total October retail sales, at $705.0 billion, were off 0.1% compared to September and posted a 2.5% annual gain. Total retail sales, from August through October, increased 3.1% compared to the same period a year ago.
October retail trade sales fell 0.2 sequentially and rose 1.6% annually, and non-store retailers, which includes e-commerce, increased 7.6% annually.
NRF reported that October retail sales, which does not include automobile dealers, gasoline stations, and restaurants, increased 3.1% annually on an unadjusted basis on a three-month moving average through October, while posting a 3.7% annual gain through the first ten months of 2023. NRF officials said that these figures match up with its 2023 estimate of a roughly 4% annual gain in 2023 over 2022.
The organization added that sales were expected to fall in October, coupled with the October Census numbers being in line with the most recent edition of the CNBC/NRF Retail Monitor, in tandem Affinity Solutions, which was issued on Monday. The Retail Monitor observed that core October retail sales were down 0.03% seasonally adjusted from September and up 2.63% unadjusted year over year compared to increases of 0.09% month over month and 4.39% in September.
“Fourth-quarter consumer spending stepped off on a more moderate pace, as expected,” NRF Chief Economist Jack Kleinhenz said in a statement. “The staying power of the American consumer has been the story of 2023, but financial conditions have tightened appreciably in recent months, curbing the purchasing power fueled by job and wage gains. Nonetheless, continued consumer resilience is still expected for the holiday season.”
Earlier this month, NRF called for solid holiday season retail sales growth in its 2023 Holiday Season sales forecast. NRF defines holiday sales as sales occurring between November 1 and December 31, excluding automobile dealers, gasoline stations, and restaurants, to focus on core retail.
As was the case a year ago, NRF’s holiday sales forecast numbers are optimistic and positive, with 2023 holiday season retail sales pegged to be up 3%-to-4% annually, coming in between $957.3 billion and $966.6 billion.
While this projected 3%-to-4% growth rate is below the 6%-to-8% called for last year, which was buoyed by trillions of dollars of federal stimulus driving what the NRF called “unprecedented rates of retail spending during the pandemic,” NRF said that the 2023 estimate is more in line with the average annual holiday increase, of 3.6%, from 2010 to 2019.
NRF President and CEO Matthew Shay recently said that in spite of the economic uncertainty and challenges that households are facing, there has been strength and resilience across the consumer sector.
“There’s been an evolution in the way consumers are allocating their dollars from month to month on their spending,” he said. “And yet consumer spending, which makes up approximately 70% of our economic activity, has kept the economic expansion on a on a steady and solid path forward.
But he added that consumers are becoming more cautious in the face of inflation and rising interest rates and the impact of monetary policy decisions, as they continue to spend on household priorities, coupled with their capacity to spend and their resources to devote to those priorities, especially on essential items. has been supported by wage growth and the resilience and strength of the job market historically low unemployment rates.
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