STORES Magazine - April 2018 - 7
The Slump That Wasn't
ometimes, you just have
to ask what people are
When January's retail sales
results were released earlier
this year, the headlines and
opening sentences of news
stories would have made you
think our industry was about
to collapse - lines like "Retail
Sales Slump," "A Tough
Month for Retailers," "Retail
Gloom" or "Surprising Drop
in Retail Sales," to cite just a few.
Granted, unjustified retail-bashing has
been the sport of the moment for much
of the past year. But just how far did sales
have to drop to produce such a reaction?
Would you believe less than one-third of a
Yes, that's right. Despite the headlines,
January's retail sales were down only
0.3 percent from December, according
to official numbers released by the
Commerce Department. And under NRF's
calculations - which exclude automobiles,
gasoline stations and restaurants - they
were down even less: 0.26 percent.
In other words, the change that
produced such a panic amounted to
less than a rounding error. And the
overreaction ignored the fact that monthly
sales numbers are subject to change -
initial reports get revised twice as more
data becomes available and often change
significantly. Final January results won't be
known until mid-April.
The stories made much of the fact that
the 0.3 percent decrease was the biggest
in 11 months. But if that's the biggest drop
in a year, it's not a sign of an industry in
decline - instead, it's a sign of stability.
Most importantly, the January "slump"
came in comparison with the best holiday
season since the Great Recession. Holiday
sales in November and December were up
5.5 percent over 2016. And
January was still a year-overyear increase of 5.4 percent.
That's growth many CEOs
would love to see.
Rather than being a slump,
NRF pointed out that the
January results showed the
momentum of the holiday
season had carried over into
the new year. The virtually
unchanged level of spending
- which came even though
the holidays were over and January is
traditionally a slow month - indicated
that 2018 was off to a positive start.
We continue to believe January's strong
showing was a sign of what's to come.
With employment up, labor markets
tightening, wages rising and consumer
confidence the highest in nearly a
generation, NRF's annual forecast calls for
retail sales to grow between 3.8 percent
and 4.4 percent this year.
In addition to the underlying
fundamentals of a growing economy,
NRF expects sales to see a boost because
of landmark tax reform that took effect
in January. Tax reform has already put
more take-home pay in workers' pockets,
and is expected to boost employment as
Whether it's headline writers, lawmakers
or analysts, it's time to recognize that retail
is thriving, not slumping. Our industry
is on the rise, with sales growing at a
healthy pace despite transformation and
challenges. And NRF is confident 2018 will
be yet another successful year.
STORES is published by the
National Retail Federation Inc.
1101 New York Avenue, NW
Washington, D.C. 20005.
CHAIRMAN OF THE BOARD
Christopher Baldwin, President and
CEO, BJ's Wholesale Club
Karen Katz, former President and
CEO, Neiman Marcus Group
PRESIDENT & CEO
Matthew R. Shay
SENIOR VICE PRESIDENTS
Cristina Ceresoli, Retail Strategy
Ellen Davis, NRF Foundation
Carleen C. Kohut, COO
Lisa Marzetti, Member Development
Susan Newman, Conferences
Bill Thorne, Communications
& Public Affairs
David French 202/626-8112
Artemis Berry 202/626-8118
1101 New York Avenue, NW
Washington, D.C. 20005
All articles published in this magazine
represent solely the individual opinions of
the writers, and not necessarily those of the
National Retail Federation.
STORES April 2018 7