2016 WAS A GREAT YEAR FOR DIY RETAIL

The holiday season is upon us, and how DIY retail will fare remains to be seen, but 2016 by most accounts has been a great year for DIY retail. The North American Retail Hardware Association (NRHA) is estimating industry growth for 2016 to end at 5.8%. The Home Improvement Research Institute (HIRI) is estimating a little higher, at 6%. The US Census Bureau reports home improvement industry sales through September at 6.7% growth over 2015.

Building materials and home improvement retail sales are 3 to 1 higher than overall retail sales increases for this year.

What has led to the success, and which areas in the DIY space have seen the best results?

Most economists agree that the renewed housing market seen in 2016 will continue into 2017. Add to that higher consumer confidence rates, multi-family housing construction has led to higher sales at home centers and lumber dealers. Remodeling projects and big-ticket purchases are stronger. Big ticket items, such as appliances, have seen the biggest sales uptick in the segment.

Accelerated Analytics DIY customers, using their retailer POS data to analyze sales and inventory, are experiencing the same trends. Across the Accelerated Analytics customer index, June and July showed poor results, followed by an improving August and strong September. 20% of Accelerated Analytics customers’ sales tickets are big ticket items, over $900 per sale. These items were identified as appliances and other expensive items, along with supporting/supplemental products.

The NHRA is predicting 2017 sales to continue this trend and that home improvement product sales should continue to outpace overall retail sales in 2017, anticipating DIY industry growth in the range of 5%.

For more industry stats and observations, download the Accelerated Analytics Retail Industry Briefing Book, which is a monthly publication of key retail industry trends, published to over 7,000 subscribers per month.

Sources: Accelerated Analytics, Hardwareretailing.com

US ECONOMY STARTS 2016 SLOW YET STEADY AS CONSUMER SPENDING GOES UP IN JANUARY

Consumer spending grew in January, showing an improvement in retail sales and home purchases. On Friday, the Commerce Department reported personal spending rose 0.5% in January from the prior month. Americans’ pretax earnings from salaries and investments increased at about the same pace. US consumer confidence dropped slightly in January but recovered slightly in February, a sign of slower but steady economic growth.

Reports Friday also revealed that gross domestic product advanced at 1%, higher than the estimate of 0.7%. Inflation still runs below the Federal Reserve’s 2% inflation target.

Improvement in overall economic growth for the quarter ending January 30 was mainly due to the fact that companies pulled back on inventory less than originally expected. Economists have cautioned that first quarter growth may be slow as companies take longer to work through their well-replenished stock.

Source: The Wall St. Journal

September Consumer Spending Index Improves While Retail Spending Index Decreases Slightly for the Month

The Consumer Spending Report US Spending Index increased 1.7 points in September. 28.7% of adults surveyed rated the US economy as excellent and 30.3% said it is getting better. There was a divide between Democrats and Republicans: 56% of Republicans felt the economy is getting worse, while Democrats had a much higher percentage believing the economy is excellent or getting better. While in most months adults aged 40-64 rate the economy and personal finances low, this month this age group had the highest percentage of respondents believing their finances are excellent.

The Retail Spending Index decreased 0.9 points. The percentage of adults that expected to spend on household expenses declined, with only 10% saying they expect to spend more. 51.2% responded they spent the same as the previous month. The outlook for next month appears to also remain flat.

Source: Chain Store Guide

US CONSUMER SPENDING INDEX DECREASES IN JUNE

The US Consumer Spending Index decreased by .4 points in June. Confidence in the economy was mixed, as 10.6% of males reported the economy as excellent, versus only 2.9% of females reporting the same. 33.5% of respondents viewed the economy as excellent or good, but 65.2% reporting it fair or poor. When asked about personal finances, 46.8% of those identified as white rated it excellent or good. Those identified as black felt their personal finances were getting better at 37.5% versus 30.2% in May. Republicans in June increased in number who believe the economy is getting better, up 22.7% versus 18.9% in May.

Source: Chain Store Guide           

SLUGGISH US CONSUMER SPENDING START TO 2015

January US consumer spending barely rose .1 percent, despite cheaper gasoline and a buoyant labor market. Economists are speculating that consumers were using their extra income to pay down debt and boost savings. This was below Wall Street’s expectations for a .4 percent increase.

"Should we be worried about the weakness of underlying sales over the past two months? Possibly," said Paul Ashworth, chief U.S. economist at Capital Economics in Toronto.

"But all the conditions are in place for a period of very strong consumption growth. We still expect to see that strength come through in the retail sales data soon."

The economy has added more than a million jobs in the past three months and the number of those seeking jobs hit its lowest level since 2007 in December.

Resource: Reuters