PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Retail Sales Bounce Back in October

By at 15 November, 2019, 5:08 pm

by Raymond J. Keating-

The U.S. Census Bureau’s latest report on retail sales showed that October 2019 retail and food services sales rose by 0.3 percent, which was a bounce back from the 0.3 percent decline in September.

The September decline was the first drop since February 2019.

Source: Federal Reserve Bank of St. Louis, FRED

As noted in our analysis of the September numbers, we wrote: “Hopefully, the September decline only reflects a one-month dip in a volatile measure, and not the start of a longer trend.” The return to growth in October was most welcome.

The hope now is that this growth becomes more robust. The early outlook on retail sales for the Christmas holiday shopping season is generally positive, according to the National Retail Federation.

How much do Christmas holiday sales matter to retailers?

The National Retail Federation has reported, “Overall, holiday sales represent about 20 percent of annual retail sales each year, but the figure can be higher for some retailers. Hobby, toy and game stores report the highest share at about 30 percent. In addition, holiday sales can be more profitable because the increased volume of purchases comes without significantly increasing retailers’ fixed costs of doing business.”

In turn, most retailers are small businesses, with 90.9 percent of employer firms in the retail trade sector having fewer than 20 employees. Therefore, a robust holiday shopping season would be a big boost to many small businesses, which would help them start the new year on a very positive note.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

 

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