Retail sales jumped 5.3% in January, as $600-per-person stimulus checks hit pocketbooks early in the month. All major categories of spending rose. The biggest beneficiaries: Department stores, up 23.5%; home furnishings, up 14.7%; electronics, up 12.0%; nonstore (mostly e-commerce), up 11.0%; sporting goods and hobbies, up 8.0%; and restaurants, up 6.9%.
More stimulus is expected: The current Democratic stimulus proposal includes an additional $1,400 per person, though with income restrictions. With COVID-19 infections dropping this month, sales should continue to be strong as restrictions are eased and more people feel comfortable shopping or eating out in-person. The recent winter storms should ding February sales in Texas and certain other states, however.
Restaurants finally caught a break in January, doing better than expected despite a continuing pandemic surge. Falling COVID-19 infection rates in February also bode well for restaurants, though likely not until after the current winter storms subside.
Even though November and December sales showed monthly declines, holiday sales were still above last year’s level. Holiday sales of in-store goods were 4.9% above last year, though only 3.0% higher if building-store sales are excluded. E-commerce sales were roughly 26% higher than last year. Of course, not all stores have done well. Clothing, electronics and department stores have a lot of ground to make up to get back to last year’s sales level.