Retail sales in the United States saw a decline in January compared to December, reflecting a slowdown in consumer spending after the holiday season.
However, figures from the CNBC/NRF Retail Monitor, powered by Affinity Solutions, indicate that retail sales remained higher than the same period last year, demonstrating continued consumer resilience.
According to the Retail Monitor, total retail sales—excluding automobiles and petrol—fell by 1.07% on a seasonally adjusted basis from December.
Despite this, sales were up by 5.44% compared to January 2023. Core retail sales, which exclude restaurants, also followed a similar pattern, decreasing by 1.27% month on month but rising by 5.72% year on year.
National Retail Federation (NRF) President and CEO Matthew Shay noted that while consumers spent less in January, this came after a strong holiday season. He also highlighted that a robust job market and wages growing faster than inflation continue to support spending.
Online sales lead annual growth
Retail sales showed mixed performance across different sectors. Seven out of nine categories recorded higher sales on a yearly basis, while only three categories saw an increase from December.
Online and other non-store sales saw the most significant year-over-year increase, rising by 30.49%.
Health and personal care stores followed with a 10.39% rise, while clothing and accessories stores experienced a 7.67% annual increase. General merchandise stores also recorded a 7.53% gain compared to January 2023.
Meanwhile, certain sectors showed weaker performance. Furniture and home furnishings stores saw a 0.27% year-over-year decline, while building and garden supply stores experienced a 0.99% drop over the same period.
Monthly sales decline across most categories
Despite the annual gains, most retail categories recorded lower sales in January compared to December. Clothing and accessories stores saw the biggest monthly drop at 2.96%, while general merchandise stores fell by 2.43%.
Furniture and home furnishings stores and electronics and appliance stores also recorded declines of 2.03% and 1.46%, respectively.
However, a few sectors managed to achieve month-over-month growth. Health and personal care stores recorded a 0.77% increase, while online and non-store sales grew by 0.44%. Building and garden supply stores also experienced a modest rise of 0.27% from the previous month.
Consumer behaviour remains key to retail trends
The Retail Monitor’s data, which is based on anonymised credit and debit card transactions rather than surveys, provides insights into shifting consumer spending habits.
Analysts suggest that consumers are becoming more selective with their purchases, balancing spending across essential and non-essential items.
While January’s slowdown follows a strong holiday period, the continued year-over-year growth indicates that consumers are still spending, albeit with a more cautious approach.
Future retail performance will likely depend on economic conditions, including inflation trends, wage growth, and overall consumer confidence.
