Retail sales plunged 1.9% in December, e-commerce hardest hit

Retail sales posted a shocking 1.9% decline in December 2021. Online stores took the biggest hit, with sales plunging 8.7% from the month before, the Commerce Department reported Friday. The advance monthly sales report to close out the year was considerably worse than the Dow Jones estimate for just a 0.1% drop.

Spending declines were spread across numerous sectors. Department store sales fell 7%, restaurant sales slipped 0.8% and online sales fell 8.7% compared with the previous month, according to the report.

Experts say multiple factors contributed to a slowdown in holiday shopping. The decline in retail sales happened at the same time Omicron cases of COVID-19 started to surge in the U.S. The last time there was a drop in retail sales was during the Delta surge.

Supply chain issues made life difficult for retailers and shoppers. For months, shoppers have been warned to get holiday shopping done early because of a lack of supply. All signs point to Americans taking that advice.

While December’s numbers were sluggish, 2021 retail sales rose 19.3% from 2020.