The news: US retail sales fell 0.6% month-over-month (MoM) in November, the biggest drop in 2022, per the Commerce Department, as consumers continued to ease up on discretionary spending.
Zooming in: Higher prices for essentials like groceries and gas continued to drag down demand for nonessential goods.
The figures are largely in line with the trends major retailers like Costco and Walmart have noticed. Costco customers are growing more value-conscious, leading to lower sales for jewelry and expensive appliances, while Walmart shoppers are waiting for big sales events to purchase pricey items and buying less clothing and home goods.
Zooming out: The Commerce Department’s retail figures offer a compelling but incomplete picture of consumer spending. They don’t show how much people are spending on services like travel, for instance, which saw a resurgence this year as most COVID-19 restrictions worldwide were lifted.
The big takeaway: While the latest retail sales numbers indicate some softness in consumer demand, other signs show shoppers are still eager and able to spend.
With that said, steady interest rate increases and slowing but persistently high inflation could lead consumers to spend more cautiously in 2023.
This article originally appeared in Insider Intelligence's Retail & Ecommerce Briefing—a daily recap of top stories reshaping the retail industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.
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