Thursday, June 21, 2018
Business

Online sales and big-ticket items boost retail

WASHINGTON — Americans ramped up spending at retail businesses in November, providing a boost to the economy just in time for the holidays.

But traditional retail stores didn't benefit as much from the latest burst of spending. Consumers bought more cars, electronics, furniture and other big-ticket items. They also did more shopping online. Those trends reflect changes in consumers' shopping habits and in the broader economy.

Total retail sales rose 0.7 percent in November, the Commerce Department said Thursday, the biggest gain in five months.

Auto sales jumped 1.8 percent in November, furniture purchases increased 1.2 percent and sales at electronics and appliance stores rose 1.1 percent.

"Consumers who have money are spending and spending big," said Diane Swonk, chief economist at Mesirow Financial.

Sales of everyday items, such as clothes and groceries, fell last month. And sales at sporting goods outlets and department stores barely rose. That partly reflects steep discounting as many shoppers still demand bargains before they buy.

But it also suggests Americans cut back on smaller purchases after splurging on cars and other large items. And it reflects shifts in where Americans do their holiday shopping.

"You can see why traditional retailers were squirming," Swonk said.

More people are shopping on their computers. Online and catalog sales rose 2.2 percent in November from the previous month — the biggest month-over-month gain since July 2012. In the past year, online sales jumped 9.4 percent. That's double the 4.7 percent increase in total retail sales.

Michael Niemira, chief economist at the International Council of Shopping Centers, pointed to another factor that could illustrate the growing health of the consumer. Americans plan to buy nearly $30 billion in gift cards this year, according to a survey by the retail federation, a record high. Yet purchases of gift cards don't count as sales in either industry or government data. Those sales are tallied when the cards are redeemed.

Economists are becoming more optimistic about the current quarter. Paul Dales, an economist at Capital Economics, expects consumer spending will rise at about a 3 percent annual pace, roughly double the third quarter's rate.

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