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Business Despite gloom at big chains, retail industry has a solid holiday season

Despite gloom at big chains, retail industry has a solid holiday season

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In recent weeks, gloomy news has abounded about how the retail industry held up during the crucial holiday season: Macy’s saw its sales sink 2.7 percent and announced it will slash 10,000 jobs. Chains such as Kohl’s, J.C. Penney, Sears and Barnes & Noble also reported sales declines. Traffic to physical stores plunged 12.3 percent amid the November and December shopping rush.

And so it might come as a surprise that the retail industry overall actually rang up solid sales. The National Retail Federation said Friday that retailers saw a healthy 4 percent increase, with a total haul of $658.3 billion. That’s better than the 3.6 percent the trade group had forecast and a significant improvement over the 3 percent growth recorded last year.

It’s a striking incongruity: The industry is faring well, while some of its most recognizable names are not. And it is indicative of a retailing landscape that increasingly is sorting into winners and losers, in which consumers’ bolstered confidence is translating into big spending in some corners of the mall and the Internet, and not so much in others.

Many forecasters noted that retailers had quite a few tailwinds this time around for their busy season. Wages have risen and consumer confidence shot up after the presidential election, factors that often make shoppers more willing to splurge. Meanwhile, Thanksgiving fell early this year and Hanukkah fell late, giving stores a longer stretch of time to court gift buyers. Even the weather largely worked in retailers’ favor: There weren’t many major snowstorms that kept shoppers and delivery trucks off the roads, and yet it was cold enough to put people in a Christmas frame of mind.

All of these factors likely contributed to the industry’s sales increases this season. E-commerce, too, was a particularly strong driver of growth. NRF reports that “non-store sales,” which includes online and catalog purchases, were up 12.6 percent compared to 2015.

So if shoppers were shifting their money away from the likes of Macy’s during the holiday season, where were they spending it? In many cases, they were likely turning to upstart retailers with a more boutique-type vibe, such as Bonobos, Warby Parker, Marine Layer or Cuyana. Small and midsize retailers have stolen away about $200 billion in annual sales from retailing behemoths over the past five years, according to consultancy Deloitte.

And in some cases, those shoppers might be headed to Amazon. Researchers at Slice Intelligence say that the e-commerce giant snapped up some 38 percent of all online shopping dollars during the holiday season, a share that no other retailer came anywhere close to matching. (Jeffrey P. Bezos, the chief executive of Amazon, owns The Washington Post.)

Department stores appear to be particularly hard hit by the latest shifts in shopping behavior. According to Commerce Department data released Friday, sales in these kinds of stores sank 7.6 percent year-over-year for the period of October through December. Electronics stores were also challenged, with 3.7 percent slip in sales. Those results were a sharp contrast to what was seen at home furnishings, personal care and clothing stores, each places where consumers stepped up their spending.


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