First, the good news...
The Chicago Tribune reports that "Decreasing unemployment, brightening consumer confidence and plummeting gas prices point to a boost in consumer spending in 2015 that should be more widespread and democratic than the spotty economic recovery of the past few years, experts say.
"Retail sales are expected to rise 4.5 percent this year, a full percentage point more than the 3.4 percent growth in 2014, according to Kantar Retail, which excluded car dealers, gas and food service from its analysis."
The story also says that "online sales, though still 10 percent of total retail sales, are expected to grow 15 percent this year, same as in 2014, while sales at physical stores are expected to rise 3.6 percent, according to Kantar."
The story also predicts that much of the growth is likely to be "driven by people under age 34, both on the lower- and higher-end of the income scale, as that age group has seen the greatest employment gains. As a result, smaller stores, from neighborhood convenience stores to upscale specialty stores, will be a key growth category because they appeal to younger people who tend to live in urban environments, dine out and shop on an as-needed basis."
The bad news...
Bloomberg reports that "the optimism surrounding the outlook for U.S. consumers was taken down a notch as retail sales slumped in December by the most in almost a year, prompting some economists to lower spending and growth forecasts.
"The 0.9 percent decline in purchases followed a 0.4 percent advance in November that was smaller than previously estimated, Commerce Department figures showed today in Washington. Last month’s decrease extended beyond any single group as receipts fell in nine of 13 major retail categories."
The National Retail Federation (NRF) put a different spin on the end-of-year holiday numbers, saying that "total holiday retail sales, which include November and December sales, increased 4 percent to $616.1 billion, which was in line with NRF’s projected forecast of 4.1 percent growth. In addition, non-store holiday sales, which is an indicator of online and e-commerce sales, grew 6.8 percent to $101.9 billion." NRF described the numbers as "welcome news," and the organization's president/CEO, Michael Shay, said that "there is every reason to believe that we have moved well beyond the days of consumer pessimism and that the trajectory for retailers continues to point up."
Meanwhile, the National Association of Convenience Stores (NACS) is out with its monthly evaluation of consumer sentiment, saying that "for the first time in two years, a majority of Americans are optimistic about the economy, thanks to the continuing slide in gas prices. A survey of gas consumers found that 57% of Americans are optimistic, including nearly two-thirds (65%) of those ages 18-34.
"The levels of consumer optimism are the highest measured in the more than two years that consumer sentiment has been measured ... Consumers are obviously pleased with the continued falling price of gasoline. Almost nine in ten consumers (88%) say gas prices are lower today than they were last month, and they report that gas prices are 50 cents per gallon lower than they were 30 days ago."
The Chicago Tribune reports that "Decreasing unemployment, brightening consumer confidence and plummeting gas prices point to a boost in consumer spending in 2015 that should be more widespread and democratic than the spotty economic recovery of the past few years, experts say.
"Retail sales are expected to rise 4.5 percent this year, a full percentage point more than the 3.4 percent growth in 2014, according to Kantar Retail, which excluded car dealers, gas and food service from its analysis."
The story also says that "online sales, though still 10 percent of total retail sales, are expected to grow 15 percent this year, same as in 2014, while sales at physical stores are expected to rise 3.6 percent, according to Kantar."
The story also predicts that much of the growth is likely to be "driven by people under age 34, both on the lower- and higher-end of the income scale, as that age group has seen the greatest employment gains. As a result, smaller stores, from neighborhood convenience stores to upscale specialty stores, will be a key growth category because they appeal to younger people who tend to live in urban environments, dine out and shop on an as-needed basis."
The bad news...
Bloomberg reports that "the optimism surrounding the outlook for U.S. consumers was taken down a notch as retail sales slumped in December by the most in almost a year, prompting some economists to lower spending and growth forecasts.
"The 0.9 percent decline in purchases followed a 0.4 percent advance in November that was smaller than previously estimated, Commerce Department figures showed today in Washington. Last month’s decrease extended beyond any single group as receipts fell in nine of 13 major retail categories."
The National Retail Federation (NRF) put a different spin on the end-of-year holiday numbers, saying that "total holiday retail sales, which include November and December sales, increased 4 percent to $616.1 billion, which was in line with NRF’s projected forecast of 4.1 percent growth. In addition, non-store holiday sales, which is an indicator of online and e-commerce sales, grew 6.8 percent to $101.9 billion." NRF described the numbers as "welcome news," and the organization's president/CEO, Michael Shay, said that "there is every reason to believe that we have moved well beyond the days of consumer pessimism and that the trajectory for retailers continues to point up."
Meanwhile, the National Association of Convenience Stores (NACS) is out with its monthly evaluation of consumer sentiment, saying that "for the first time in two years, a majority of Americans are optimistic about the economy, thanks to the continuing slide in gas prices. A survey of gas consumers found that 57% of Americans are optimistic, including nearly two-thirds (65%) of those ages 18-34.
"The levels of consumer optimism are the highest measured in the more than two years that consumer sentiment has been measured ... Consumers are obviously pleased with the continued falling price of gasoline. Almost nine in ten consumers (88%) say gas prices are lower today than they were last month, and they report that gas prices are 50 cents per gallon lower than they were 30 days ago."
- KC's View:
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It is instructive of consumer skepticism, I think, that while 31 percent of US shoppers believe that gas prices will go down next month, an equivalent number - 31 percent - think they'll go up.
All the evidence is that while the economy has improved enormously for some sectors of the population, in this case the rising tide has not lifted all boats. And sales are only going to really take off when the middle class starts to experience the lift that the upper class has felt.
