November Retail Sales Increase 6 Percent

by Doug Desjardins

Thanks to a strong Black Friday and record Cyber Monday, retailers reported a better-than-expected jump in November sales.

According to a Thomson Reuters survey of 30 major retailers, retail sales jumped 6 percent in November and nearly doubled the company’s earlier November forecast of 3.6 percent. That was the largest single-month increase in sales since November of 2007, one month before the start of the Great Recession.

Overall, the Thomson Reuters survey showed that three-fourths of retailers matched or exceeded their sales forecasts for November, indicating that sales were strong across-the-board in both retail channels and product categories. Retailers also reported that sales were steady throughout the month, hinting that strong numbers on Black Friday and Cyber Monday – when online sales eclipsed $1 billion -- were the continuation of a trend.

Some of the strongest performers included Limited Brands with a 10-percent jump in sales, JC Penney with a 9.2 percent increase and Nordstrom’s with a 5.1-percent increase.

Another positive sign was an increase in consumer confidence in November. According to research firm IHS Global Insight, the Consumer Confidence index rose from 49.9 in October to 54.1 in November, still well below pre-recession levels but a sign that consumers are ready to spend.

“This report is pointing to a more promising holiday retail sales season,” said Chris Christopher, an analyst with IHS.

According to the National Retail Federation (NRF), Black Friday and the long Thanksgiving weekend were a major factor in the increase in November sales. The NRF estimates that 212 million people shopped over the weekend, compared to 195 million last year, and that consumers spent an average of $365.34, a 6.4-percent increase over 2009.

“It’s good to see consumers out there and spending in a number of sectors,” said Mike Berry, director of industry research for MasterCard Advisors Spending Pulse. “November wasn’t really an oasis – we saw good numbers in September and October as well – so we can certainly be hopeful that they’ll continue on through the rest of the season.”

That view was echoed by retail analyst John Long. “The good news is that consumers spent through the month of November and not just on Black Friday,” said Long, a retail strategist with consulting firm Kurt Salmon and Associates. “But it’s difficult to say whether the promotions we saw in November, particularly early in the month, pulled forward some of the volume we would be expecting in December.”

Long and other analysts cautioned that the wave of “early Black Friday” sales and other November promotions may cannibalize sales in December and bring holiday sales increases back into the 3-percent to 4-percent range originally forecast. But for the time being, there are few complaints from retailers who saw just a 0.5-percent increase in sales in November 2009, numbers that led to relatively flat holiday sales.

Resources

Retail Sales Jump 6% in November

Positive Sign for Retailers: Confidence Rises

U.S. Retail Chains Report a Robust November