Blog
January 29, 2025

December Retail Sales Show Strong Finish to 2024

Holiday deal days, such as Cyber Monday, drive growth for electronic and clothing categories 

By Jonathan Silver, CEO of Affinity Solutions

Following a late Thanksgiving, pushing Cyber Monday into December, retail sales surged in the final month of 2024.  

The December CNBC/NRF Retail Monitor, powered by Affinity Solutions, reveals robust growth across categories, fueled by extended Cyber Week deals, strategic discounting, and a boost from interest rate cuts and post-election optimism.  

The stronger-than-expected holiday season should encourage retailers as we head into 2025 – in particular those categories that saw significant rebounds. 

Tech and Home Spark Year-End Cheer 

The Electronics & Appliances sector experienced a remarkable comeback, with a 10.23% year-over-year (YoY) and 3.25% month-over-month (MoM) increase. Aggressive Cyber Week sales likely contributed to some of this growth, but perhaps more notably, the growth in this category reflects growing consumer confidence as we close out the year.  

Similarly, the Furniture & Home Furnishings category, which tends to be a harbinger of overall economic trends, ended the year positively. Sales in this durable goods category grew 5.34% YoY and 0.84% MoM. December’s end-of-year deals and clearance sales at stores like Wayfair, Ruggable, and Saatva encouraged customers to make larger purchases and take advantage of discounted items. The trend reversal from previous months’ declines underscores the strategic timing of discounts that resonate with consumers. 

High-End Threads Steal the Show 

Sales in Clothing & Accessories also thrived, increasing 14.47% YoY and 4.07% MoM in December. However, this level of growth was not shared among all clothing retailers. A closer look shows that while some drew in customers with holiday deals, others struggled to win consumer dollars. 

Retailers that attract more affluent consumers, like Lululemon, Abercrombie & Fitch, and Arc’teryx, raised their Q4 outlooks in light of their strong 2024 holiday sales. On the other hand, many retailers targeting lower- and middle-income shoppers did not see the same growth. Kohl’s and Macy’s both rang in the new year with announcements to close stores due to lagging sales. Similarly, Dollar Tree, which caters to lower-income customers, reported that their customers are spending more cautiously.  

These mixed results illustrate the different realities faced by the wide range of retailers in the Clothing and Accessories category and underscore the importance of truly understanding your customers. The challenges department stores face are very different from high-end retailers, which are different from discount retailers. Knowing how your customers are purchasing both in your store and at competitors will continue to be vital in 2025.   

Feast or Famine? 

Despite a YoY rise of 4.27%, the Grocery & Beverage category only grew 0.59% MoM. Food prices continue to weigh on consumers’ minds with four of the six major grocery store food group indexes up in December, led by the eggs index increasing 3.2%.  

Food Services & Drinking Places also grew YoY (+1.07%) but declined slightly MoM (-0.25%) reflecting ongoing concerns consumers have to feed their families in an environment of higher food costs. The consumer price index rose 2.9% on an annual basis in December (up from 2.7% in November), further contributing to belt-tightening consumers around necessities like food purchases, both at home and away from home.   

What Retailers Need to Know for 2025 

Against the broader macroeconomic picture, retailers should feel optimistic about 2025. The unemployment rate is still fairly low and wage growth continues to exceed the rate of inflation. Combined with 2024 ending on a high note with a YoY increase of 2.58% for Total Retail and 2.84% for Core Retail, this year looks promising.  

However, we’ll be closely watching the impact of the new administration’s economic policies, including possible tax cuts and steep tariffs, as these issues could impact retail sales significantly. The CNBC/NRF Retail Monitor, powered by Affinity Solutions, will continue to track spending to guide retailers, so they can adapt to opportunities and challenges in the evolving landscape with agility.  

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