The Current, delivered daily.
U.S. holiday retail sales fell short of the forecast for the season, according to the National Retail Federation.
Data released Wednesday by the NRF for sales in November and December showed the following:
- Holiday sales totaled $936.3 billion, representing 5.3% growth over 2021.
- The NRF had predicted 6-8% growth for the holidays.
- Ecommerce and nonstore sales for the season rose 9.5% to $261.6 billion. This also fell below the forecast of 10-12%.
- Retail sales for the full year of 2022 totaled $4.9 trillion, growing 7% over 2021.
The news came on the same day that the U.S. Commerce Department reported that total U.S. retail sales for December fell by 1.1% from the month before. It marked the second straight monthly decline, while year-over-year growth slowed to 6%.
On the holiday results, NRF leaders said the collision of elevated inflation and the Fed’s efforts to cool prices and demand by raising interest rates were drivers of the lower-than-expected growth. The comparison with 2021 was also tough, given that prior year saw record levels of growth at 13.5% amid unprecedented demand for goods. NRF CEO Matthew Shay called the results “respectable” in the economic environment.
“Consumers shopped in record numbers and retailers delivered positive holiday experiences to inflation-wary consumers, offering great products at more promotional price levels to fit their stretched budgets,” said Shay, in a statement. “The fact that we saw retail sales growth on top of December’s 14% gain in 2022 shows the resilience of consumers and the creativity of retailers in driving consumption and economic activity while addressing high inflation and continued cost pressures.”
(Source: National Retail Federation)
With consumers spending more on gas and food this year, discounts were a key driver of holiday sales throughout the season. Retailers offered deals beginning in October in an effort to deliver. The results of those fall events are outside these holiday totals.
“We knew it could be touch-and-go for final holiday sales given early shopping in October that likely pulled some sales forward plus price pressures and cold, stormy weather,” NRF Chief Economist Jack Kleinhenz said. “The pace of spending was choppy, and consumers may have pulled back more than we had hoped, but these numbers show that they navigated a challenging, inflation-driven environment reasonably well. The bottom line is that consumers are still engaged and shopping despite everything happening around them.”
In updates that held back full numbers, retailers have posted mixed results for the holidays so far. Macy’s talked of “lulls” during the weeks between Black Friday and Christmas. Abercrombie and American Eagle Outfitters said they had successful holidays. Lululemon warned that its profit would be lower than expected. More will be learned when retailers report earnings for the fourth quarter over the next two months.
NRF’s sales totals are not adjusted for inflation, and leave aside restaurants and auto categories to focus on core retail. Results in other categories include:
- Grocery and beverage stores were up 7.8%.
- General merchandise stores were up 3.8%.
- Sporting goods stores were up 3.5%.
- Health and personal care stores were up 2.8%.
- Clothing and clothing accessory stores were up 2.2%.
- Building materials and garden supply stores were up 1.5%.
- Furniture and home furnishings stores were down 1.1%.
- Electronics and appliance stores were down 5.7%.
Trending in Economy
The cuts amount to 4% of the ecommerce platform's workforce.
eBay is set to become the latest ecommerce platform to conduct layoffs.
The company announced plans on Tuesday to lay off 500 employees, which amounts to about 4% of its workforce. Layoffs were set to take place over the next 24 hours, the company said Tuesday evening.
In an SEC filing, CEO Jamie Iannone said the decision to make layoffs came after consideration of the macroeconomic environment and where the company could best invest for the long-term.
Iannone said the moves “are designed to strengthen our ability to deliver better end-to-end experiences for our customers and to support more innovation and scale across our platform.”
“Importantly, this shift gives us additional space to invest and create new roles in high-potential areas — new technologies, customer innovations and key markets — and to continue to adapt and flex with the changing macro, ecommerce and technology landscape,” Iannone wrote. “We’re also simplifying our structure to make decisions more effectively and with more speed.”
eBay is one of the oldest ecommerce platforms, and remains an active marketplace for both new and resale items. The San Francisco-based company has yet to report results for the fourth quarter of 2022. In the third quarter, the company said gross merchandise volume was down 11%, and revenue was down 5% year-over-year.
Yet the company has also continued to invest. In 2022, it acquired collectibles platform TCGPlayer and myFitment, which provides parts and accessories for automotive and powersports. It also opened a secure vault for trading cards, and launched livestreaming.
eBay is also seeing a boost from advertising, with revenue driven by promoted listings up 19% in the third quarter.
With the layoffs, eBay joins other tech companies that provide the infrastructure of ecommerce in making layoffs. Amazon, Shopify, Salesforce, BigCommerce and Wayfair have all recently announced layoffs. Technology giants like Meta, Google and Microsoft have also made job cuts.
It comes as inflation is weighing on consumers’ discretionary spending, and the return to more in-person shopping throughout 2022 led to a correction following aggressive hiring during the pandemic.