Retail sales just ho-hum this holiday season
Preliminary reports show holiday sales rose only 0.7 percent over November and December, which could be the economy's worst holiday performance since 2008.
As the U.S. holiday season winds down, retailers were left to hope that post-Christmas sales could help salvage their worst performance since 2008, preliminary data showed.Skip to next paragraph
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Holiday-related sales rose 0.7 percent from Oct. 28 through Dec. 24, compared with a 2 percent increase last year, according to data from MasterCard Advisors SpendingPulse.
The preliminary estimate from SpendingPulse was in line with other estimates showing weak growth during the holiday season, when retailers can book about 30 percent of annual sales and in many cases half of their profits.
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And last week, research firm ShopperTrak lowered its holiday season forecast, calling for sales in November and December to increase only 2.5 percent from 2011, down from 3.3 percent.
The latest holiday season sales could be the worst performance since 2008, during the last recession, when sales dropped 4.4 percent in November and December.
"The broad brush was Christmas wasn't all that merry for retailers, and you have to ask what those margins look like if the top line didn't meet their expectations. So it could be a very unmerry Christmas for retailers," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.
Analysts and industry groups expected sales to grow at a slower pace than in 2011 and 2010. The National Retail Federation predicted 4.l percent sales growth, versus a 5.6 percent increase a year earlier.
One bright spot has been online sales, which continue to grow at a faster pace. On Christmas Day, online sales jumped 22.4 percent, outpacing the 16.4 percent increase in 2011, according to IBM Digital Analytics Benchmark, which tracks more than 1 million e-commerce transactions a day from 500 U.S. retailers.
For the season, the Mid-Atlantic region showed the worst performance, with a 3.9 percent decline according to MasterCard SpendingPulse, as sales in early November were disrupted by Superstorm Sandy, which hit the densely populated area in late October.
"In general retailers were not necessarily expecting a huge season," said Michael McNamara, vice president of research and analysis at MasterCard SpendingPulse. "Inventory and management were tight really ever since 2008-2009."
With the season a bit weaker than expected, especially in areas hit by Superstorm Sandy, "there could be some extra clearance this week and going into January," he said.