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Consumers Fearless in October

RFP
Retail sales surged 0.8% in October, well ahead of expectations on the eve of the all-important holiday season. Indeed, Halloween has become an important predictor as it is now the second-largest holiday for many retailers. Adults enjoy celebrating and dressing up as much as kids.

Some of the gains we saw were temporary. Vehicle sales jumped on replacement demand following another round of hurricanes. Gains at building material and garden stores were robust as repairs picked up and remodeling remained strong.

Core retail sales (excluding vehicles, building materials and gasoline) rose a solid 0.3% in October, the same as September. A pickup in spending in traditional department and clothing stores helped buoy those gains. Improvements in the job market are finally translating into people buying something other than gym clothes. Spending on both men and women’s clothing has been robust in recent months after being nearly dormant.

The outlook for big-box discounters and online retailers is still much better than that for traditional department stores. Low-income households are returning and shopping at big-box discounters, while online retailers continue to gain market share. Online spending surged more than 12% from a year ago in October.

Bottom Line
Consumers are spending without fear. We expect that to continue this holiday season. The gains will not lift all retailers’ boats, but will be spread across more households than we have seen in recent years. That in and of itself is something to cheer.

Media Contact
Karen Nye
T +1 312 602 8973
Karen.Nye@us.gt.com
Other Inquiries
Na Tasha Lowe
T +1 312 754 7368
NaTasha.Lowe@us.gt.com