The FINANCIAL — Holiday Retail sales rose 3.6 percent from Nov. 1 through Dec. 24, compared with a 3.2 percent drop in the year-ago period, according to figures from MasterCard Advisors' SpendingPulse. The Internet was the big winner this holiday season, with online sales rising a hefty 15.5%.
The spending estimate for Nov. 1 to Dec. 24 excludes automotive and gasoline sales, the Purchase, New York-based researcher said in an e-mail yesterday, Bloomberg reports. SpendingPulse measures retail sales across all payment forms, including cash and checks. The firm didn’t disclose dollar spending totals. A jump in purchases the week before Christmas helped year- over-year electronics sales increase 6 percent since Black Friday on Nov. 27, and 5.9 percent for the holiday season starting Nov. 1, SpendingPulse said. More shopping occurred online, with sales rising 18 percent from Nov. 27 to Dec. 24.
“People were more comfortable doing last-minute shopping online, especially with the bad weather,” Kamalesh Rao, director of economic research for SpendingPulse, said in a telephone interview yesterday, according to the same source. A snowstorm on the east coast the weekend before Christmas closed some malls early on Dec. 19 and kept shoppers at home.
In 2008, retailers posted a drop in sales, their worst holiday performance in decades, after a global financial markets crisis, according to Reuters. SpendingPulse has been tracking holiday spending figures since 2002, for the period from November 1 until Christmas Eve. "Last year the economy and consumer spending were in free fall. This year we're talking about an environment that has stabilized, that has seen a leveling off," said Rao.
Luxury sales, which include sales at high end department stores such as Saks Inc and Nordstrom, recovered after a bloodbath in 2008, edging up 0.8 percent, the same source reports. Jewelry sales shot up 5.6 percent and gathered steam in the final days before Christmas, Rao said, aided in part by Wall Street bonuses this year and the stock market's rally in 2009. "Luxury and jewelry are very sensitive to what's happening in the financial markets," Rao said. Sales at specialty electronics chains such as Best Buy Co Inc rose 5.9 percent, in part because of pent up demand after sales fell sharply in 2008, Rao said. Men's apparel sales rose 3.9 percent, while women's clothing sales edged down 0.3 percent, though sales picked up in December.
But industry watchers warned that the results didn't point to a strong industry turnaround or the return of free-spending shoppers. The sales gains over 2008 were generally moderate. And last year's holiday figures were so dismal, analysts said, that 2009 had almost nowhere to go but up, Los Angeles Times informs. "I see it as a cautious return to spending," said Rao, which estimates sales for all forms of payment, including cash, checks and credit cards. "There wasn't a huge resurgence. Even though we're seeing some growth in terms of the holiday season, we're still shy of the levels we saw from a couple years ago."
Although signs are emerging that the U.S. economy is improving, many Americans are keeping a lid on their spending because of tight credit, deflated housing values and a weak labor market, according to the same source. "I've definitely been shopping at a lot of secondhand stores and shopping the sales," said Meredith Petro, 22, a technical designer at a garment manufacturer in downtown Los Angeles. "Everyone I know is just trying to be as conservative as possible because you just never know what's going to happen."
Matthew F. Katz, a managing director in the retailing practice of AlixPartners, a reorganization firm, said he expected December sales to be about the same as last year, or down slightly, after the final results are tallied, The New York Times reports. “We’re going to be pleased that we’re not seeing double-digit negatives,” he said, but with the exception of major chains including Wal-Mart, Costco and Nordstrom, “I don’t think we’ll see many on the positive side.”
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