Retail sales in the United States grew by an unimpressive 0.7% this holiday season, between Oct. 28 and Christmas Day, according to Bloomberg News. While holiday sales did show some growth, it was less than half the growth seen last holiday season, when sales grew by 2%, and much lower than the growth predicted by the National Retail Federation. It represents the worst growth since the 2008 recession, a year when there was a decline of 5.5%.
These numbers have a deep impact on retailers’ bottom line – between 20% and 40% of their annual revenue comes during this short two-month period. Businesses measure their success during the holidays very closely because it can represent the difference between a good year and bad year.
SpendingPulse vice president Michael McNamara blamed the poor sales numbers on Hurricane Sandy and political gridlock.
“Weather events and the fiscal debate both anchored the season in terms of growth,” he said. “The media coverage, which did a good job of explaining the negative consequences of the fiscal cliff, created this negative trend in consumer confidence and spending.”
Hurricane Sandy had a large impact on the sale of luxury goods during the holiday season, as well. The New York area accounts for 20% of U.S. luxury sales, and this area was hit the hardest by the hurricane.
Many buyers stayed home to purchase gifts this holiday season. Chase Holiday Pulse measured a 15.2 percent rise in online holiday sales over last year. Total transaction volume increased 24.3 percent this year, meaning that people spent less money per transaction but made a higher number of them. The average order value decreased 7.3 percent. Online buyers spent a large amount on specialty apparel and consumer electronics.
MasterCard, which has a network of 60,000 merchants, says that Nov. 27 was the biggest day for online sales this year; Dec. 10 through Dec. 14 was another very strong period for online sales, when consumers spent around $7 billion. Dec. 10 was even called “Green Monday” by some retailers because it began the strongest week of the holiday season, jumping 16.6% above that week in 2011.
Another indication of sales numbers is the length retailers go to get rid of their inventory at the end of the Christmas shopping season. The Wall Street Journal reported that clothing stores Old Navy and Gap offered steep discounts of 40 to 70% off during the final weekend of shopping and Walmart cut toy prices by 11% to increase last-minute sales. Retail analyst Marshal Cohen of NPD Group Inc. observed, “We have gone from retailers managing sales to trying to save profits.” Clearly, retail sales in the United States were not strong during the 2012 holiday season, but at least they did not decline from 2011 numbers.
[cf]tracking[/cf]
No Comment