Kiplinger's Retail Outlook: Sales on a Downtrend
Weakening retail sales and high inventories point to further cuts in production.
- (opens in new tab)
- (opens in new tab)
- (opens in new tab)
- Newsletter sign up Newsletter

Kiplinger's Economic Outlooks are written by the staff of our weekly Kiplinger Letter and are unavailable elsewhere. Click here for a free issue of The Kiplinger Letter or for more information.
Retail sales are likely on a downtrend as consumers respond to a weakening economy by buying less. December sales excluding gasoline dropped 0.8%, following a similar decline in November.
Other factors were involved, as well: Holiday sales were shifted earlier in the season this year because of fears of shipping delays. Also, recent price declines in motor vehicles are making these purchases look smaller. Nevertheless, retailers are finding themselves with more inventories than they would like, which should result in fewer orders for manufacturers in the future.
Sales declines are deepest at department, electronics, appliance and furniture stores. These drops may indicate that retailers will have an incentive to offer discounts during January white sales. The drop in e-commerce sales was expected after sales jumped during the Amazon Prime Day sale in October.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Motor vehicle sales declined in December for the second month, even after accounting for price declines. Car sales have been volatile and are affected by vehicle availability. But it may be that a peak in sales has been reached.
A possible indication that the economic slowdown is spreading beyond goods purchases: Sales at restaurants have started falling after the long uptrend when consumers became more comfortable going out again after the pandemic. This new softening in dining out should temper what have been pretty strong increases in menu prices.
Consumers are tightening their budgets amid inflation and fears of a slowing economy. Retailers such as Walmart have noticed shoppers favoring lower-priced items over higher-priced ones. Other retailers, such as Target, have lowered their earnings guidance for the season.
Going forward, some sales weakness will result from consumers switching their buying patterns to more services. Purchases of goods soared at the beginning of the pandemic in 2020. While services have picked up since then, the share of goods in household spending is still above its pre-pandemic norm. That suggests a further drop in goods buying in 2023 as the economy slows.
Related content
-
-
Legalized Weed Sales Begin in Missouri: This Week in Cannabis Investing
The Show Me State legalized recreational weed in 2022, with sales officially underway as of last Friday.
By Morgan Paxhia • Published
-
Four Steps to Financial Wellness for Black History Month
The small financial steps you take today, such as showing yourself empathy and building credit and savings, can add up to help you create a better tomorrow.
By Aaron Harding, CFP® • Published
-
Kiplinger Energy Outlook: Watch Out for Rising Gas Prices
Economic Forecasts After a long decline last year, the price at the pump is perking up again.
By Jim Patterson • Last updated
-
Kiplinger's Inflation Outlook: Goods Prices Continue to Ease, Rent Costs Accelerate
Economic Forecasts Kiplinger's Inflation Outlook: We expect the declining overall inflation trend to continue.
By David Payne • Last updated
-
Kiplinger's Trade Outlook: Trade Deficit Narrows Sharply in November
Economic Forecasts Kiplinger's Trade Outlook: Trade Deficit Narrows Sharply in November
By Rodrigo Sermeño • Last updated
-
Kiplinger Jobs Outlook: Surprising Market Strength Won’t Last
Economic Forecasts The labor market is still strong now but will slow in the months to come.
By David Payne • Last updated
-
Kiplinger's Interest Rates Outlook: The Fed Gives Some Clarity on Rate Hike Intentions
Economic Forecasts Signs of a slowing economy and easing inflation are key to the interest rates outlook.
By David Payne • Last updated
-
Kiplinger's GDP Outlook: GDP Growth at the End of 2022 Will Not Last
Economic Forecasts Don’t put too much stock in the economy’s positive showing for the third and fourth quarters of last year.
By David Payne • Last updated
-
Kiplinger's Housing Outlook: Home Prices Keep Softening
Economic Forecasts Kiplinger's Housing Outlook: Homebuilders slow down as worries about the housing market mount.
By Rodrigo Sermeño • Last updated
-
The Most Expensive Natural Disasters in U.S. History
Economic Forecasts Wind, water, fire and drought have all wreaked havoc on the United States. What’s been the worst?
By David Muhlbaum • Last updated