NRF: Retail sales up in November, consumer in ‘good shape’

The Retail Monitor Report for November – excluding automobile sales, restaurant and gas station receipts – shows retail sales were up 0.73% from October, and up 4.17% year over year.

November is a crucial month for retail sales with holiday season promotions ramping up ahead of Thanksgiving and continuing through the Christmas holiday.

Retail Monitor sales use actual credit and debit card purchase data compiled by Affinity Solutions and it does not need to be revised monthly or annually. The report is commissioned by the National Retail Federation (NRF) and compiled by CNBC. The results do not factor in core inflation which was up 4.1% in November compared to a year ago, according to the U.S. Bureau of Labor Statistics.

NRF Chief Economist Jack Kleihnhenz said holiday sales will be solid and in line with historical growth of 3.6% despite inflation. He said consumer confidence has not mirrored actual sales and sentiment looks more pessimistic than consumer spending patterns indicate through November. Kleinhenz said NRF predicts holiday retail sales from Nov. 1 through Dec. 31 – excluding autos, gas and restaurants – will total between $957.3 billion and $966.6 billion.

“The consumer is in relatively good shape despite higher borrowing costs and price inflation for food and shelter that remains elevated, although improved from recent months,” Kleinhenz said in his monthly forecast.

On a monthly basis, consumers spent more in all but two retail categories, garden/building and home decor. The Retail Monitor reports online sales were up 26.27% year over year and up fractionally from October. Online sales also include catalog sales and those ordered online and picked up in stores.

Health and personal care sales jumped 9.15% year over year and increased 1.6% from October. BLS reported the medical care index showed prices were fractionally higher for services and prescriptions in November compared to October. Healthcare costs were up 5% year over year in November.

Shoppers also spent more on sporting goods, music, hobby and books with those cumulative sales rising 8.25% year over year, and ticking up 1% from the October results. Consumer spending on clothing and accessories rose 5.81% in November and was also up 0.87% from the prior month. BLS reported apparel prices were 1.1% higher in November compared to a year ago.

Grocery and beverage sales were up 3.19% year over year with a fractional increase month over month. BLS reports food prices (grocery stores) rose 1.7% from a year ago, while restaurant prices were up 5.9% year over year. Other categories like electronics and appliances saw flat sales in November compared to the prior month and year.

Building and garden sales were down fractionally from a year ago, and dipped 1.16% month over month. Consumers also bought less furniture and home furnishings with sales down 2.08% year over year.