by But sales slide significantly from November as inflation appears to be taking a toll
WASHINGTON — December sales for U.S. furniture and home furnishings stores were up 11.1% from the same month a year ago for a 19th consecutive year-over-year gain.
But the 5.5% decrease from adjusted sales the month before was precipitous — among the steepest slides of all sectors tracked by the government — as rising inflation in the category may be simmering consumer demand.
According to the latest Department of Commerce report, sales for the sector increased to $11.80 billion in December, up from $10.62 billion in December 2020. Sales for the sector were down 5.5% from November’s estimate, which was revised up slightly to $12.48 billion from the previously reported $12.45 billion. The only sectors posting greater decreases from November were non-store retailers (mostly e-commerce companies), down 8.7% and department stores, a subset of general merchandise stores, down 7%.
Combined retail and food services sales in December outpaced the furniture sector’s gain again, up 16.9% from December a year ago to $626.8 billion. They were down 1.9% from November, well below expectations. Retail trade sales alone increased 14.4% year-over-year and were down 2.1% from October.
Despite the furniture sector’s continued strong YOY percentage growth, some retailers say inflation is now driving the month-after-month sales growth more so than any continuing surge in consumer demand or foot traffic. Earlier this week the Labor Department reported inflation spiked 7% last year over 2020, the highest jump in 40 years. The price of furniture and bedding was up 13.8% YOY (see page 11). Bedroom furniture prices were up 10.4%. Living room, kitchen and dining room furniture prices rose 17.3% YOY.
But back to the December sales report. Among the sectors posting the greatest YOY increases were bars and restaurants, the top gainer up 41.3%, and gas stations, up 41.5%, as the price for fuel has increased even more than furniture on a year-over-year basis. Clothing stores saw a 29.5% gain and department store sales were up 22.5% YOY, despite the big decrease from November.
All sectors tracked by the government posted increases over December a year ago. The slowest grower was grocery stores, up 8.2%.
For the fourth quarter ended in December, furniture and home furnishings stores saw a 14% increase over the same time a year ago. The combined retail and food services sales were up 17.1% and non-store retailers saw a 10.4% gain.
