Discount chains such as Wal-Mart Stores and Costco Wholesale look like the winners from the holiday season.
In December, mass merchants posted their best monthly sales gain in more than two years, according to figures collected by research firm First Data. Revenue rose 8.3 percent, the biggest increase since August 2012. The gains were primarily driven by shoppers making more store visits than before.
The results suggest that Americans are staying frugal more than five years after the end of the last recession. They’re also spending a smaller portion of their budgets on clothing. Men’s and women’s apparel chains, shoe retailers and department stores all posted sales declines last month.
“The winners for December were clearly discount stores and wholesale clubs,” said Chen Grazutis, a retail analyst for Bloomberg Intelligence.
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One discount chain, Target Corp., enjoyed a rebound following a data breach in 2013’s holiday season, he said. Target and other mass merchants also benefited from sluggish sales at department stores, Grazutis said.
Consumers have diverted more of their discretionary spending toward monthly costs such as mobile-phone bills, hurting clothing sales, said Craig Johnson, president of Customer Growth Partners, a New Canaan, Conn.-based consulting firm.
In 2000, spending on clothing accounted for 5 percent of a typical U.S. household’s budget, Johnson said. It’s now about 2.8 percent, he said.
Retail as a whole rose 2.5 percent in December after a 2.2 percent gain in November, according to First Data, which collects information from purchases made in stores and online.
Grocery stores such as Kroger Co. and Safeway Inc. also posted robust sales as a group, with a gain of 6.2 percent last month.
Even though department-store sales fell in December, there may be reasons for optimism. Sales at J.C. Penney Co. and Kohl’s Corp. probably improved in the second half of the month, according to Bloomberg Intelligence, which cited First Data research. The decline stemmed in part from heavy discounts meant to lure shoppers.