Key takeaways:
- Despite some moderation in December, the holiday fourth quarter turned in record growth. Adjusting to staying home likely drove more growth than traditional gift shopping.
- Early holiday promotions in October and a deteriorating job market in December dented everything from consumables to apparel in the last month of the holiday period.
- It was a record fourth quarter for online, but December wasn’t as impressive.
- In-store, home improvement, and sporting goods channels were the fastest growing in December and over the holiday, signaling adjusting to staying home was more of a concern for shoppers than holiday shopping.
- Mass likely stole share of traditional gift purchases from specialty apparel, specialty consumer electronics, and department stores.
Top-line sales for core retail moderated in December on a year-over-year basis. The slowdown was broad based within retail. Outside retail, restaurant and bars sales (-21%) fell at their steepest pace since June. (Channel retail sales data from recent months is available at the end of this piece. Kantar Retail IQ clients can access more charts, including those for the holiday fourth quarter.)
Nonstore vs. brick-and-mortar: Nonstore, including online, eased in December after surging growth in November. This combined with a slowdown in brick-and-mortar growth in the month as well.
The fourth-quarter performance of the narrower ecommerce channel will be released on Feb. 19.
Supercenter, club, and small-format value: This combined channel slowed after strong growth in the previous two months, but still outpaced year-ago growth. Sales data available only for months prior to December indicate that the small-format value channel likely posted double-digit gains over the holiday but slowed relative to the summer months. Big-box mass retailers maintained high growth in the first two months of the fourth quarter in addition to rapid online sales.
Supermarket: This channel posted its slowest growth since March. It still widely outpaced growth in the year-ago period, partly due to high inflation. Food inflation likely contributed to half of the channel growth in December.
Drug, health, and beauty care: This channel was among the few to accelerate in December. It’s unclear what led to the pickup in December, but results from Walgreens indicate prescription drugs drove growth over the holiday, not the front end.
Home improvement: This channel led all channels except online in December and in the holiday fourth quarter. Including its online sales it likely even stronger all formats except pure play online retailers.
Apparel, jewelry, and shoe specialty: Sales declines steepened in this channel throughout the fourth quarter.
Traditional and discount department: This combined channel posted in December its worst sales decline since May.
