Retail sales last month bested 2020 comparisons, despite headwinds from Omicron and supply chain disruptions.
Retail sales in December were $626.8 billion, marking an increase of 16.9% from December 2020. December’s numbers were down 1.9% from November 2021, which was likely a result of more people completing their holiday shopping earlier in the season to avoid stock-outs from supply chain issues.
Overall, total sales throughout 2021 were up 19.3% from 2020. Sales between October 2021 and December 2021 were up 17.1% compared to the same period in 2020. December gasoline sales were up 41% year over year and food services and drinking places were up 41.3% year over year.
The slight month-over-month dip in sales from November to December comes after a pattern of strong sales in November, October, September and August after consumer activity in July dipped 1.1% from June. However, December sales were still far beyond 2020 levels.
These strong sales numbers come amid a sustained period of record-high inflation. Consumer prices rose by 7% in December compared to a year ago, according to the Bureau of Labor Statistics’ monthly report. This number was up from the 6.8% growth in November and represented the highest inflation rate since the 12-month period ending in June 1982. It also marked the third consecutive month of inflation over 6%.
Online prices in December grew 3.1% year-over-year, according to recent data from Adobe. This marked the 19th straight month of online inflation, up 0.8% from November. Standout categories were grocery, where prices increased 4.9% year over year, and apparel, which grew 16.6% year over year.
Skyrocketing consumer demand coupled with limited product supply, high import duties on certain products, and higher wages have partly contributed to recent inflationary trends.
Despite the price increases, online consumer spending has remained high. In 2021, online spending hit a record $855 billion, marking a 9% increase over 2020.
“Despite last minute panics about supply chains, covid variants and staffing issues, December turned out to be another strong month for retail,” said Neil Saunders, managing director of GlobalData, in a statement.
Saunders said that the strong sales rates in 2021, partially spurred by higher prices from inflation, will likely carry into 2022. But the new year, as a whole, will likely experience more modest growth rates compared to 2021.