SpendingPulse Detects Little Pre-Xmas Retail Activity
by Christina Lee on December 23rd, 2008
Reports of this year’s pre-Christmas retail environment showed that, despite deep discounts and high hopes, consumers did not shop as much as they did last year.
Retail sales are expected to fall by 8 percent in December through Christmas Eve, after falling 5.5 percent last month, according to MasterCard’s SpendingPulse report. Both declines, with the economy and weather in mind, added up to “one of the most challenging holiday shopping seasons in decades,” said Michael McNamara, vice-president of research and analysis.
With the average price per gallon down by almost 50 percent compared to last year, gasoline sales also dragged down total retail sales in December. Excluding gasoline, total sales had dropped by just 2 percent, according to the report.
And while lower gas prices usually lead to more shopping trips, very few storefronts survived this season’s battle in scrounging up sales without losing traffic. Retailers that saw increased traffic right before Christmas include Target, Best Buy, and Toys“R”Us – though their gains, even combined, could not compare to Wal-Mart’s 36 percent rise from last year, according to America’s Research Group.
While sales in specialty, men’s and women’s apparel all fell by at least 16 percent, MasterCard’s SpendingPulse noted that online retail sales “continues to be an area of relative strength” during the holiday season. However, other reports delivered mixed results.
According to comScore, last weekend’s online spending totaled $677 million – a figure that can be interpreted in two very different ways, with five less days in this holiday shopping season. As both the fourth weekend after Thanksgiving and the last weekend before Christmas, this year’s Dec. 20-21 sales can be interpreted as either a 17 percent year-to-year loss or almost a 100 percent gain, respectively.
“A positive late-season boost for online retail perhaps,” said Gian Fulgoni, comScore chairman, “but it’s ultimately not going to do much to make up for the significantly shorter shopping season this year.”