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U.S. retail sales data from the federal government for the holiday shopping month of December was released on Wednesday morning.
On a seasonally adjusted basis, the US Commerce Department reported that overall sales results were the following:
- Monthly: Sales declined 1.1% from November.
- Annually: Sales rose 6% from December 2021.
- Nonstore sales, which includes ecommerce, grew 13.7% year-over-year, while falling 1.1% for the month.
- Core retail sales, which exclude food service and auto measures, grew 5% year-over-year, according to GlobalData’s calculation.
While retail sales continue to grow, there are signs of a slowdown. Year-over-year growth for December 2022 posted the slowest growth in 22 months, according to GlobalData Managing Director Neil Saunders. The rate of increase has nearly halved since August, when it was 10.2%.
“Some of this is down to moderating inflation, but some is also a consequence of a more pressured and concerned consumer who has become more frugal about spending,” Saunders said. “If this pattern is emerging over the holidays – a time when people tend to throw caution to the wind as they spend to enjoy themselves – it does not bode well for the sober months of January and February which are traditionally more subdued and constrained as consumers assess their finances and pay down holiday debt.”
What the holidays say about 2023
The latest data offers another warning sign: Things may get harder in retail in 2023. Saunders said that recent months have shown that it is “quite clear that the year ahead will be much tougher” than 2022. But he warned that it is important not to be “overly pessimistic.” Consumer spending has mostly held up over three years of a pandemic, supply chain chaos and inflation. At the same time, the inflation rate is coming down.
“As such, what we are likely to see is a trimming at the edges of retail, as people continue to adjust behaviors and shopping patterns to make ends meet, rather than a full-blown retail recession,” Saunders said.
Inflation remains high in some categories, offering a reminder that this period of high prices is not yet over just because the calendar turned to a new year. The price increase in food for December was 11.8%, according to the Consumer Price Index. That was well ahead of the 6.5% overall inflation rate, and continues to lead consumers to make choices.
“Across the whole holiday period our data show that consumers were working hard to reduce costs by trading down to value retailers, buying more own brand product, and modestly cutting the amount they buy,” Saunders said. “Many households were less wasteful with food over this holiday period, and retailers had to work a lot harder to stimulate sales.”
The month-over-month decline seen this month is also a somehwat ominous sign, but there could be a silver lining, according to a note from Bank of America Global Research. While the bank's economists said holiday spending appears "soft," technical details of the data could provide a lift to start the year.
"Seasonal factors have not fully adjusted for the shift to more front-loaded holiday shopping since the start of the pandemic," BoA wrote. "Therefore, the seasonal adjustment likely exaggerated the weakness in retail sales in December. If this is correct, we should see a big bounce in retail sales, and consumer spending more broadly, in January."
Wholesale prices decline
Another sign of easing inflation showed up in the U.S. Commerce Department’s report on wholesale prices.
Prices for goods before they reach retail declined 0.5% in December.
The year-over-year wholesale inflation rate was 6.2%, the lowest of the last 12 months.
This was driven by a sizable decrease in the price of goods at 1.6%. Energy prices also declined 7.9% for the month.
This came after an increase in wholesale prices in October and November.
The Producer Price Index tends to be a forward-looking measure of inflation that tracks prices of goods and services before they reach consumers.
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On the Move has hiring news from Walmart US, Etsy, commercetools and more.
This week, retailers are bringing on C-level talent in areas such as people, operations and transformation. Plus, Kohl’s appoints an activist investor’s choice for CEO, Fanatics taps a former Snap executive for livestream shopping and Etsy brings aboard Facebook’s former general counsel.
Tom Kingsbury was appointed CEO of Kohl’s. Kingsbury was named interim CEO in December upon the resignation of now-Levi’s President Michelle Gass. Now, Kingsbury will have the job on a permanent basis. Kingsbury served as CEO of Burlington Stores from 2008-2019. Kingsbury was nominated by activist investor Macellum Advisors, which was pushing for change at Kohl’s. With Kingsbury’s appointment as CEO, Macellum has agreed to a “multi-year standstill.”
Judy Werthauser was appointed chief people officer at Walmart U.S. Werthauser comes to the teen-focused retailer from Five Below, where she served as EVP and chief experience officer. Over her four-year tenure, the chain grew from about 750 stores to more than 1,300 locations. Werthauser also served on the board of BJ's Wholesale Club, and is now resigning from that position. “I am excited to work alongside the world-class Walmart U.S. team as they bring the purpose of building a better world – helping people live better and renewing the planet while building thriving, resilient communities – to life,” Werthauser wrote in a LinkedIn post.
Mike Brewer was named chief operating officer at Crate & Barrel Holdings, overseeing operations at Crate & Barrel, CB2, Crate & Kids and Hudson Grace. Brewer brings 20 years of experience from Nike, where he served in roles including sourcing, manufacturing and supply chain. Crate & Barrel said Brewer’s appointment was part of the home retailer’s “ongoing efforts to evaluate and alter its structure in ways that help support overall growth.”
Keith Melker. (Courtesy photo)
Keith Melker was appointed chief strategy and transformation officer at JCPenney. Melker comes to the department store retailer from Wehner Multifamily, where he served as CEO. He was also a previous chief strategy officer at the Kimberly-Clark Corporation. Melker will oversee the transformation office, which includes ownership of metrics such as profitable traffic, inventory management, digital growth and strategic partnerships. With this move, Katie Mullen will remain chief strategy officer.
Blaine Trainor is joining ecommerce software provider commercetools as VP of global partnerships and alliances. In the role, Trainor will lead the headless commerce company’s partnerships ecosystem, working with companies including Deloitte, CapGemini, AWS and Google Cloud. Trainor previously served in senior leadership roles at SAP over a 12-year tenure, and also held sales roles at hybris software and Sterling Commerce.
Nick Bell, a former Google and Snap executive, will lead a new livestream shopping division of Fanatics, Footwear News reported. Bell previously led the teams behind Google Search Experience, and served as VP and global head of content and partnerships at Snap Inc. Bell will lead the Fanatics Live division, which will launch a standalone app that is geared toward collectibles.
NIck Bell. (Photo via LinkedIn)
Colin Stretch was appointed chief legal officer at corporate secretary at Etsy, effective Feb. 14. Stretch previously served as general counsel at Facebook from 2013-2019. He then spent two years as leader in residence at Columbia University Law School's Reuben Mark Initiative for Organizational Character & Leadership, and went on to the law firm Latham & Watkins.
"Colin's extensive experience will be critical to Etsy's efforts to ensure we remain a safe and trusted marketplace, broaden our reach across all our brands, and advocate for microbusinesses around the world,” said CEO Josh Silvermann, in a statement.