An uptick in consumer spending in November, due to holiday shopping, has given the economy a nice boost.
Retail sales climb higher as Christmas approaches
The Daily News reported that retail sales in November jumped up 0.7 percent over the previous month, representing the largest gain since March, and 5.1 percent higher than November 2013, according to the Commerce Department.
Sales excluding automobiles, gasoline, building materials and food services also climbed 0.6 percent, which demonstrates that the strength in the economy is not just limited to retail spending, reported The Daily News. Lower gas prices resulted in more cash in consumers’ pockets and coupled with new hires and wage increases, the scene is set for a period of economic growth. Consumer spending accounts for approximately two-thirds of U.S. economic activity, so confidence is currently high.
The Labor Department also revealed that unemployment benefits requests dropped to a three-week low as layoffs declined. Economists have also said that a 1.2 percent increase in clothing sales during October add one more sign that the holiday season will see solid sales. Jack Kleinhenz, chief economist for the National Retail Federation, affirmed the forecast of a 4.1 percent gain in holiday sales this year.
“Increasing wages combined with lower gas prices are providing retailers with an early holiday present this year … Every economic indicator is pointing toward a strong holiday season,” said Kleinhenz, according to The Daily News.
Shopping trends have changed this year
The Associated Press reported that approximately 133.7 million people shopped in stores and online on the weekend of Black Friday. Although less than last year, consumer behavior has changed. In response to delayed shopping, due to e-commerce and consumers’ desire to avoid crowds at stores, retailers have pushed or delayed deals back more than in previous years. The NRF indicated that people spent money on bigger items such as cars, versus typical holiday apparel and electronics. Motor vehicle sales rose 4.6 percent higher than last year, according to Autodata Corp.
In order to capitalize on the positive outlook, some malls, according to CBS News, are offering consumers new perks. Many malls now have gift-wrapping and some are delivering items so customers don’t have to carry heavy bags. A select few have even announced that they will transport shoppers to their premises. The Grove in Los Angeles offers customers who spend at least $450 a free Uber ride. Rick Caruso, owner of The Grove, indicated that he wants to bring customers back in into malls by enticing them with services.
“I think the future of a traditional indoor mall, I think they’ve got big challenges. Somehow they have to create a real different experience,” Caruso said, according to CBS News. “How do they differentiate themselves? You’ve got to wrap it around an experience, you’ve got to wrap it around service.”
As e-commerce becomes increasingly attractive to consumers, businesses will have to continue to think of creative ways to lure customers hack into stores.Back To Blog