National results
Nationally, retail sales in December were disappointing. A review shows national retail sales posted a strong gain of 5.4 percent from December of last year, the largest year-over-year growth since November 2007. However, December 2008 posted dismal retail sales numbers, so this gain should not be weighted too heavily. On a month-to-month basis in 2009, the market showed signs of rallying; retail sales looked strong in November, anticipating the beginning of at least adequate holiday sales. But hopes were dashed as the numbers came in reporting a drop of 0.3 percent in national retail sales from November to December. The Bloomberg market consensus predicted an increase of 0.5 percent for the same time frame. This information could suggest that most consumers did their holiday shopping in November rather than December 2009 as November retail sales were comparatively strong on both a monthly and annual basis. Coming out of the 2009 holiday season, the national retail sales trend remains positive for the year and appears to be showing growth.
Regional results
Regional retail sales were slightly more encouraging than the national results. Retailers throughout the district reported that sales either met or surpassed expectations in December. Because expectations for holiday sales were conservative at best, retailers had prepared accordingly by choosing to keep inventories at low levels, and many expressed that this "just in time" level may be the new norm.
In December, about half of our contacts reported sales above year-ago levels. Similar responses were logged when we asked how the entire holiday season stacked up to last year's experience. Information gathered from other retail contacts showed strength in discount stores and outlets while high-end/luxury stores had a mixed performance during the holiday season.
What can we take from this?
Overall the nation experienced disappointing holiday sales. While November numbers looked promising, the trend did not continue into December. Regionally, retailers appear to have experienced somewhat stronger holiday sales trends, especially in December, than the nation. Retail surveys for September, October, and December 2009 reported about half the retailers in the Southeast expressing optimism for the coming months—the highest levels since September 2007, which is an encouraging sign.
By Courtney Nosal, a research analyst in the Atlanta Fed's research department