Shoppers came out in force during the holidays, driven by a strengthening economy, high consumer confidence and rebuilding efforts after a season of natural disasters across the country.
Retail sales during November and December increased 5.5 percent, to about $692 billion, from a year earlier, according to data released on Friday by the National Retail Federation.
It was the largest increase in holiday sales since the recession of 2008, exceeding the federation’s forecast of $682 billion, or growth of about 4 percent.
The trade group said the strong numbers showed that the retail industry might not be as fundamentally troubled as many analysts perceived it to be.
“We knew going in that retailers were going to have a good holiday season, but the results are even better than anything we could have hoped for, especially given the misleading headlines of the past year,” Matthew Shay, the president and chief executive of the National Retail Federation, said in a statement.
His rosy assessment, however, followed a tough year for traditional retailers, who have been struggling to adjust their business models to meet consumer preferences. Companies have closed thousands of stores, laid off workers and offered deep discounts, as Amazon continues to capture a larger share of the market.
Online sales continued to soar. According to an analysis by First Data, the payments company, holiday e-commerce sales increased 10.4 percent, compared with growth of 4.0 percent in brick and mortar sales.
But at least some of that online growth was captured by traditional retailers that have been building their e-commerce operations.
“We have to knock down this false choice between retail and online,” Mr. Shay said in an interview. “Online is just a channel of retail.”
Natural disasters appeared to contribute to the strong sales, as homeowners began rebuilding after the hurricanes in Texas and Florida and wildfires in California. While much of the destruction occurred before the holiday shopping season, it most likely took time before insurance money and disaster aid began to find its way into consumers’ pockets.
The strongest holiday sales occurred in Houston, which had been pummeled by a Hurricane Harvey, First Data analysis showed.
“Clearly that had an impact in boosting the retail numbers in the affected areas,” said Craig Johnson, president of Customer Growth Partners, a retail consulting firm.
Sales at stores offering building materials and supplies increased 8.1 percent in November and December from a year earlier, while home-furnishings and furniture sales increased 7.5 percent, according the retail federation, which draws its data from the Census Bureau. Those two categories showed the biggest gains in sales, followed by electronics and appliance stores, at 6.7 percent.
While the storm may have helped in some areas, retail sales showed strength across a broad range of categories, economists at Morgan Stanley pointed out in a research note on Friday, prompting the bank to increase its estimate for economic growth in the fourth quarter of 2017.
Even categories that have struggled the most showed signs of improvement. Sales by general merchandisers — which include department stores — increased 4.3 percent in November and December from a year earlier.
Large traditional retailers such as Macy’s, Target and Kohl’s have reported sales gains during the holidays that have helped lift their investors’ confidence.
Macy’s said sales rose 1 percent in November and December from a year earlier. After some analysts and industry experts panned Macy’s business plans and questioned its ability to compete, the company’s shares have been steadily climbing in recent months, rising more than 50 percent since early November.
“We intend to close the fourth quarter in a good position and head into 2018 with momentum,” the chief executive of Macy’s, Jeff Gennette, said in a statement.
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