Holiday Retail Sales Decline 2.5%

123jump.com Staff
26 Dec, 2008
New York City

Holiday sales appear to be weaker than earlier estimated in the U.S. The latest report for the period ending on Dec 24, estimated sales decline of 8.8% including gasoline. Luxury, electronics and apparel sales declined the most. Large discounts of more than 60% have failed to pull more shoppers.

[R]12:05 PM New York – Holiday sales are weaker than expected and the weakness is likely to persist in the last five days of year.[/R]

Holiday sales in the first three weeks of December were weaker than expected.

Consumers ignored larger than expected discounts, a fall in gasoline price at pumps and talks of government stimulus package. Consumers remain skeptical of the health of the economy and job market and are more likely to save than spending.

Total retail sales in the holiday season between November and December 24 declined 8% from a year ago and declined 5.5% in November according to the data tracked by SpendingPulse of MasterCard Inc. The report does not include sales at Wal-Mart Stores.

Excluding gasoline sales, overall retail sales declined 4% in November and 2.5% in December.

Online sales were the least affected in the season with a decline of only 2% from a year ago. Amazon.com ((AMZN)) reported its best holiday sales in 14 year of history. The company received orders for 6.3 million items on December 15 and shipped 5.6 million on the busiest day for the year.

Industry wide online sales rose 17% in 2007 and dropped 1% in the holiday season this year by December 14, according to the data tracking firm ComScore Inc and dropped 2.2% for the period between November and Dec 24 according to SpendingPulse report.

Luxury retail sales appear to be hit the hardest as most customers wait till the last minute to shop for bargains. While several luxury retailers have lowered prices between 30% and 45%, consumers have been looking for larger discounts. Sales at luxury retailers tracked by SpendingPulse plunged 35% in the holiday season and the sales in last five days in the year are expected be just as weak.

Apparel sales declined in the holiday period as well. Women’s apparel sales declined 23% and men’s apparel sales fell 14% in the season. Women’s apparel sales were hit harder for teenage and mid-price categories as discounts between 60% and 70% failed to generate traffic.

Electronics and appliances sales plunged 27% as consumers searched for flat panel television sets, music devices and game players. Flat panel LCD TV prices have plunged 40% from a year ago.

Retailers Edge Lower

Amazon.com ((AMZN)) gained 1.6% or 82 cents to $52.26, Macy’s ((M)) declined 3.2% or 28 cents to $8.54, Target Corporation ((TGT)) edged up 16 cents to $32.51 and Wal-Mart Stores ((WMT)) edged 3 cents lower to $55.41.

Nordstrom ((JWN)) declined 2% or 25 cents to $11.81, Abercrombie & Fitch ((ANF)) edged 3 cents higher to $21.99, Limited Brands gained 5 cents to $9.31 and Coach, Inc declined 7 cents to $20.29.

Tiffany & Company ((TIF)) declined 1 cent to $22.33 and Best Buy dropped 3 cents to $26.67.