Data released Friday by the Commerce Department showed that total U.S. retail sales increased by a seven-year low of 2.1 percent in 2015, the second worst growth performance since 2007.
By comparison, sales grew at an annual rate of 3.9 percent in 2014.
The slow-up in consumer spending can be explained by two external factors: declining oil prices and warm winter weather.
According to the American Automobile Association (AAA), the average price of regular pump gas has decreased to its lowest level in seven years, at $1.93 per gallon as of Thursday.
In addition, the National Oceanic and Atmospheric Association said last month was the warmest December on record for the lower 48 states. Such temperate conditions help explain why retail sales actually declined in the last month of the year, compared to the previous December.
Despite the mitigating factors which helped slow total sales growth, 2015 still lagged behind previous years in the current decade. Between 2010-2014, the average year-over-year increase in sales was 5.1 percent; in 2015, when taking gas sales out of the equation, retail only gained by 3.9 percent.
2015’s top performing sectors were restaurants, which gained an impressive 8.1 percent, online retailers, home furnishing stores, and sporting good stores.
Despite the overall disappointing figures, 2015 set a record for new automobile sales.
On the heels of the bad news Friday also came an announcement by America’s biggest retailer, Wal-Mart, that it will be closing 269 stores world-wide.
154 stores will close in the U.S., including all of its smallest “Express” stores, starting at the end of January.
While 95 percent of the closings will occur within 10 miles of another Wal-Mart, 60 of its stores in Brazil and another 55 in other Latin American countries will be shut down.
The company’s announcement marks the first across-the-board store closings in more than two decades, according to Credit Suisse.
While Wal-Mart is contracting in some areas, it’s continuing to expand in others, as the retail giant also said it is going ahead with plans to open 142-165 new stores in the U.S., and 200-240 outside the country in fiscal year 2016, which starts February 1.
[Bloomberg] [MarketWatch] [AP]