Falling slightly below November levels, furniture sales continued its year-over-year climb in December 2020, up for the month for the fifth month in a row, closing out the year with strong sales, although the sector’s sales for the entire year were down.

And despite bringing in a total of $10.11 billion in December, according advance estimates from the Department of Commerce’s monthly report on retail sales, furniture and home furnishings store sales totals for the month were down 0.6% from November 2020’s adjusted $10.17 billion total, which was originally set at $10.3 billion in last month’s report, but up 3.1% from December 2020.

Similarly, for the three month period of October-December, totals were up 3.5% year-over-year and down 0.9% when compared with July-September of this year.

The slight dip in furniture and home furnishings sales month to month could be attributed to consumer holiday shopping trends. Research has indicated that many people opted not to shop traditional retail holidays this year out of concern over coronavirus safety in crowded stores, and many retailers obliged those concerns by elongating holiday sales into the months before and after those holidays, meaning Christmas and end-of-year shopping may have taken place during November or may even be taking place now in January.

Additionally, many retailers have said that  customers are more likely to shop when bolstered with coronavirus stimulus money, and the latest roll out of that began at the end of December and continues into January.

The year-over-year growth may reflect ongoing consumer demand in the category and interest in home-related projects as people spend more time at home, also seen in the continued year-over-year growth of sectors like building material and gardening equipment.

Overall, furniture and home furnishings store sales fit a pattern in December that was reflected across several other retail sectors with U.S. retail and food services sales coming in for December at $540.9 billion, dipping 0.7% from the previous month and rising 2.9% which from last year. Retail trade sales alone also fell into the same pattern, up 6.3% from last December but down 0.3% from November 2020.

Looking more closely at other sectors in the month of December, non-store retailers took the hardest hit month-over-month, dropping 5.8%, followed by electronics and appliance stores, down 4.9%, and food services and drinking places, down 4.5%.

On top from November 2020 was gasoline stations, up 6.6% for the month of December, followed by auto and other motor vehicle dealers, a subset of motor vehicle and parts dealers, followed by motor vehicle and parts dealers, up 2% and 1.9%, respectively. Miscellaneous store retailers came in close behind with a 1.7% growth.

Year-over-year, non-store retailers flipped its month-over-month standing, taking the top spot with a 19.2% increase in December. Building material and gardening equipment took the second place spot with a 17% increase, and sporting goods, hobby, musical instrument and book stores came in just below that total with a 15.2% increase, flipping the sectors’ standings in November 2020’s year-over-year comparisons.

Some sectors saw big losses year-over-year despite the larger trend. Department stores, a subset of general merchandise stores, fell 21.4% from December 2019, and food services and drinking places followed just behind, dropping 21.2%.  Clothing and clothing accessories stores battled it out with electronics and appliance stores for the third place spot, dipping 16% and 16.6%, respectively.

2020 sales totals

Looking at the overall picture for the year, 2020 was more profitable than 2019 for all but seven sectors and subsectors that fell below 2019 profits, even though shutdowns in the first part of the year and changes to day-to-day business in the wake of COVID-19. In the end, U.S. retail and food services sales ended on a positive note with a total of $6,258.19 billion, a 0.6% growth from the previous year.

In the furniture and home furnishings sector, 2020 was not overall as profitable as 2019, with sales totals falling 5.4% year-over-year for the 12 month period of 2020, putting sales for the year at $111.44 billion.

Sectors coming out on top in 2020 include non-store retailers, up 22% for the year, building material and gardening equipment, up 14%, and food and beverage stores, up 11.5%.

Taking the largest hits were clothing and clothing accessories stores, down 26.4%, food services and drinking places, down 19.5%, and department stores, a subset of general merchandise stores, which fell 18.1%.

Businesses seeing the largest growth for 2020 may be able to contribute much of their success to the pandemic, while those that fell may be able to place blame on the same culprit. Non-store retailers were able to continue business as usual, while brick-and-mortar retailers were forced to close their doors throughout much of the U.S. in March and April because of the pandemic. Even after things reopened, many consumers chose to continue to buy more online to avoid crowds in-stores.

Looking at the successes of building material and gardening equipment, many consumers undertook home renovation and decoration projects during the year as they spent more time at home because of the pandemic. This may have also contributed to  year-over-year increases seen in monthly furniture and home furnishings sales.

Looking at sectors that fell this year, clothing and clothing accessories stores lost business this year both to general pandemic decreases in store traffic and to the lack of consumer interest in clothing purchases for things like school and work as many people moved to doing both from home or virtually. Department stores, which often include large clothing departments, could have run into similar issues, though that subsectors’ sales have been on the decline for several years.

Uniquely, two food and beverage related sectors saw opposite sales results in 2020, with food services and drinking places falling dramatically and food and beverage stores rising by double digits, and those results could be in reaction to each other and the pandemic.

While food services and drinking places across the country were forced to close down and/or limit capacity throughout the year, more people started cooking and drinking at home to supplement, leading to more food and beverage purchases and food and beverage stores.

Source link