Holiday shoppers reward NC retailers online and in stores
Shoppers in North Carolina reflected a national enthusiasm for spending over the holidays.
Mastercard SpendingPulse, which tracks both online and in-store spending across all payment types, reported this week that retail sales in the U.S. rose 5.1 percent between Nov. 1 and Dec. 24 from a year earlier. Overall, consumers spent over $850 billion this holiday season. (Those numbers do not include automobile sales.)
That trend seems to hold true for North Carolina retailers as well.
“It was a strong holiday season for North Carolina retailers, which was helped by a strong economy and lower gas prices,” Andy Ellen, president and general counsel of the N.C. Retail Merchants Association, said in an interview the day after Christmas. “Retailers have reported brisk sales and foot traffic that exceeded projections.”
Some of the biggest categories for spending, according to the Mastercard report, were in apparel and home improvement. Department store sales were down overall, which Mastercard attributed to store closings across the country, but online sales for department stores were up 10.2 percent.
ONLINE SHOPPING MORE POPULAR THAN EVER
Americans enthusiastically embraced online shopping this year, which meant a 19.1 percent increase across the country compared to last year’s numbers.
Amazon, the king of online retailers, announced a record-breaking holiday season.
The Seattle-based company said in a news release that it sold “millions more Amazon devices” this year compared to last, and that customers also opened “tens of millions” new Amazon Prime memberships or free trials this season. Amazon also said that more than 50 percent of the items sold on Amazon during the holiday season came from smalland medium-sized businesses that supply their products.
Some of Amazon’s biggest sellers this season, in addition to Amazon devices such as the Echo and Amazon Fire TV, were toys, such as the L.O.L. Surprise! Glam Glitter Series Doll and the LEGO Creator Mighty Dinosaurs; electronics, such as the Bose QuietComfort Wireless Headphones; and apparel, particularly items made by Carhartt, which sold more than 1 million items on Amazon over the holiday shopping season.
The increase in online sales is good for North Carolina’s coffers, since the state began requiring online retailers to pay sales tax here starting Nov. 1, even if those companies are not physically located here. That directive, meant to level the playing field for brick-andmortar stores paying taxes in the state, was supported by the N.C. Retail Merchants Association.
Amazon began collecting and paying sales tax in North Carolina in 2014, even before it set up distribution centers in the area.
Ellen said that while online shopping has continued to increase, most gift returns are still made at the store level, even if the items were purchased online.
“Both independent and chain brick-and-mortar retailers continue to develop an omni-channel presence to best reach their customers,” Ellen said.
WILL THE GOOD TIMES LAST?
Many experts, including those at the N.C. Retail Merchants Association, credit the strong economy and good job market for the holiday’s consumer confidence, but some warn that those good feelings may not last.
Apart from the concerning Wall Street roller coaster rides, the U.S. economy has indeed been strong this year, on track to see the economy grow about 3 percent for all of 2018.
But challenges — such as the government shutdown, a possible trade war with China and higher borrowing costs from rising interest rates — could see the economy slow next year, the Associated Press has reported.
In addition, a recent study by Duke’s Fuqua School of Business showed that a majority of global CFOs surveyed think a recession is on the way.
But both John Graham, a finance professor at Duke’s Fuqua School of Business, and Mark Vitner, a senior economist at Wells Fargo in Charlotte, said that if a recession occurs, North Carolina’s economy is likely to fare better than most, because of its population growth and diverse population.