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2023: A Good Start for Retail and Restaurants

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Retail sales spiked last month—up 1.5% from December and 4.8% higher than January 2022, according to the National Retail Federation (NRF). This follows a 2022 holiday season (covering November and December) that rang up sales of $934.7 billion, up 5.1% from 2021.

Total 2022 retail sales were up 7% to $4.9 trillion. And online retail sales for 2022 topped the trillion-dollar mark for the first time, coming in at $1.03 trillion.

NRF Chief Economist Jack Kleinhenz explains the January sales boost: “Consumer spending clearly picked up after the holidays. Sales were helped by job and wage growth, slightly lower inflation, and unusually warm and dry weather. A large cost-of-living adjustment gave Social Security beneficiaries more money to spend, and many consumers were still drawing on savings built up during the pandemic. January made up for the softer pattern of spending in December that came after early shopping pulled holiday spending forward this past fall.”

January sales were up in nearly all retail categories, led by sporting goods and clothing and clothing accessories. In addition, online (and other non-store) sales increased 5.7% over January 2022.

NRF’s calculation of retail sales does not include automobile dealers, gasoline stations, and restaurants. But Restaurant Hospitality reports that, according to data just released by the U.S. Commerce Department, consumer spending was particularly robust at restaurants, up 7.2% last month from December 2022 and up over 25% from January 2022 (not counting for inflation).

Plus, they report that preliminary data from the U.S. Census Bureau released by the National Restaurant Association shows that “eating and drinking places registered total sales of $95.5 billion on a seasonally adjusted basis in January, from about $89 billion in both November and December, when menu prices were consistent to what they are now.”

The National Restaurant Association’s chief economist Bruce Grindy says, “January was still a positive sales month for the restaurant industry.”

These positive retail and restaurant numbers were echoed by the most recent SpendingPulse report from Mastercard, which shows January retail sales, in-store and online (not counting automotive), increased 8.8% from January 2022. Online sales alone rose 8.4% year-over-year.

Mastercard says January restaurant sales showed “strength,” rising 24.2% from January 2022.

Busy restaurant stock image by AhBoon.Net/Shutterstock

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