The run-up to Christmas sales levels in the US failed to meet low expectations. Now retailers are hoping for a wee bit of salvation in after-Christmas clearance.
Cutbacks on clothing, electronics and jewelry led U.S. retail sales to drop as much as 4 percent this holiday season as consumers limited purchases to necessities, according to SpendingPulse data.
Spending was the lowest since MasterCard Advisors started tracking data in 2002 to provide the SpendingPulse service, said Michael McNamara, vice president of research and analysis, in an interview yesterday. He estimates sales, excluding autos and gasoline, fell 2 percent to 4 percent from Nov. 1 to Dec. 24….
From Nov. 1 through Dec. 24, women’s clothing sales dropped 23 percent and men’s fell 14 percent, according to SpendingPulse.
Combined electronics and appliance sales tumbled 27 percent, with purchases over $1,000 suffering the most, according to SpendingPulse data. Luxury sales, including jewelry, plunged 35 percent, the data showed.
Purchases over the Internet fared better, with a 2.3 percent decline.
From the Wall Street Journal:
….considering individual sectors, “This will go down as the one of the worst holiday sales seasons on record,” said Mary Delk, a director in the retail practice at consulting firm Deloitte LLP. “Retailers went from ‘Ho-ho’ to ‘Uh-oh’ to ‘Oh-no.'”
The holiday retail-sales decline was much worse than the already-dire picture painted by industry forecasts, which had predicted sales ranging from a 1% drop to a more optimistic increase of 2.2%.
Luxury goods, once considered immune from economic turmoil, were hardest hit, with sales falling 21.2%, compared with a jump of 7.5% a year ago, when the economy had just begun to sputter. Including jewelry sales, the luxury sector plunged by a whopping 34.5%.
During the same period last year, overall retail sales rose a modest 2.4%, helped by late-season discounting that enticed procrastinating shoppers. But this year, after a moderate uptick in shopping activity boosted by steep promotions the Friday after Thanksgiving, shoppers closed their wallets and reopened them only cautiously, worried by job losses, a sinking stock market and a recession climbing into its second year.
Originally published at Naked Capitalism and reproduced here with the author’s permission.