Holiday Retail Sales Sink (Updated)
Last-minute holiday shopping by discount-hunting consumers failed to make a dent in a bleak holiday retail season, as sales (excluding automobile spending) declined 8% in December (through Dec. 24) from the previous year, after having fallen 5.5% in November, according to data from
MasterCard Advisors'
SpendingPulse.
The sharp declines in gasoline prices--40% from a year earlier--contributed to the dismal results; excluding gasoline, retail sales declines were 2.5% in Nov. and 4.0% in December,
reports the Wall Street Journal.
Sectors that sell food, such as grocery and general merchandise stores and some sectors of the restaurant sector, helped keep total declines in the single digit range, and eCommerce sales remained comparatively healthy, SpendingPulse
said (pdf).
Still, "a difficult economic environment combined with unfavorable weather during the last week of shopping made 2008 one of the most challenging holiday shopping seasons in decades," said Michael McNamara, vice-president of research and analysis for SpendingPulse.
Among the items faring the worst were luxury goods, with sales down 21.2% from last year; in 2007, luxury sales were up 7.5% from 2006 levels. Including jewelry, luxury was down 34.5% this year.
Online sales have been down 2.3%--though last year retail e-commerce was up 22.4% in the same period.
Other categories with notable sales declines were electronics and appliances, which, combined, fell 26.7% (as opposed to a 2.7% gain in 2007); also, women's apparel was down 22.7% (down 2.4% a year ago).
Other apparel highlights:
- Total apparel sales declines stabilized in the 19% to 21% range compared with the same period last year, only slightly higher than the 19.5% year-to-year decline through the first week in December, and the 19% decline in the first half of November.
- Men's apparel showed some improvement toward the end of the season, with a total decline of 14.3% for the season compared with the same period in 2007, up slightly from the 16.1% decline through the midseason and a 19.1% drop for the week after Black Friday.
- Footwear sales also showed relative resilience, declining 13.5% compared with the 2007 holiday season.
Last year, Nov.1-Dec. 24 total retail sales were up, barely--just 2.4%--helped by last-minute bargain-hunting; but this year consumers were much more cautious as they have confronted a recession, job losses, and bad news from Wall Street.
Not to mention a string of retail bankruptcy proceedings and liquidations, including
Circuit City Stores,
Mervyn's, and
Linens 'N Things Inc. The weak holiday sales mean more chains are likely to follow suit next year.
SpendingPulse data are based on sales activity in the MasterCard payments network with estimates for all other payment forms, including cash and checks.
