U.S. Holiday Retail Sales Growth Weakest Since 2008 - WBOC-TV 16, Delmarvas News Leader, FOX 21 -

U.S. Holiday Retail Sales Growth Weakest Since 2008

Posted:
(Photo: MGN) (Photo: MGN)

WASHINGTON (AP)- U.S. shoppers spent cautiously this holiday season, a disappointment for retailers who slashed prices to lure people into stores and now must hope for a post-Christmas burst of spending.
 
Sales of electronics, clothing, jewelry and home goods in the two months before Christmas increased 0.7 percent compared with last year, according to the MasterCard Advisors SpendingPulse report.
 
That was below the healthy 3 to 4 percent growth that analysts had expected - and it was the worst year-over-year performance since 2008, when spending shrank sharply during the Great Recession. In 2011, retail sales climbed 4 to 5 percent during November and December, according to ShopperTrak.
 
This year's shopping season was marred by bad weather and rising uncertainty about the economy in the face of possible tax hikes and spending cuts early next year. Some analysts say the massacre of schoolchildren in Newtown, Conn., earlier this month may also have chipped away at shoppers' enthusiasm.
 
Retailers still have time to make up lost ground. The final week of December accounts for about 15 percent of the month's sales, said Michael McNamara, vice president for research and analysis at MasterCard Advisors SpendingPulse.
 
Still, this season's weak sales could have repercussions for 2013, McNamara said. Retailers will make fewer orders to restock their shelves, and discounts will hurt their profitability. Wholesalers will buy fewer goods and orders to factories will likely drop in the coming months.
 
Steep discounts weren't enough to get people into stores, said Marshal Cohen, chief analyst at the market research firm NPD Inc.
 
"A lot of the Christmas spirit was left behind way back in Black Friday weekend," Cohen said, referring to the traditional retail rush the day after Thanksgiving. "We had one reason after another for consumers to say, 'I'm going to stick to my list and not go beyond it.'"
 
Holiday sales are a crucial indicator of the economy's strength. November and December account for up to 40 percent of annual sales for many retailers. If those sales don't materialize, stores are forced to offer steeper discounts. That's a boon for shoppers, but it cuts into stores' profits.
 
Spending by consumers accounts for 70 percent of overall economic activity, so the eight-week period encompassed by the SpendingPulse data is seen as a critical time not just for retailers but for manufacturers, wholesalers and companies at every other point along the supply chain.
 
The SpendingPulse data released Tuesday, which captures sales from Oct. 28 through Dec. 24 across all payment methods, is the first major snapshot of holiday retail sales. A clearer picture will emerge next week as retailers like Macy's and Target report revenue from stores open for at least a year. That sales measure is widely watched in the retail industry because it excludes revenue from stores that recently opened or closed, which can be volatile.
 
In the run-up to Christmas, analysts blamed bad weather for putting a damper on shopping. In late October, Superstorm Sandy battered the Northeast and mid-Atlantic states, which account for 24 percent of U.S. retail sales.
 
Shopping picked up in the second half of November, but then the threat of the country falling off a "fiscal cliff" gained strength, throwing consumers off track once again.
 
Lawmakers have yet to reach a deal that would prevent tax increases and government spending cuts set to take effect at the beginning of 2013. If the cuts and tax hikes kick in and stay in place for months, the Congressional Budget Office says the nation could fall back into recession.
 
Shopping over the past two months was weakest in areas affected by Sandy and a more recent winter storm in the Midwest. Sales declined by 3.9 percent in the mid-Atlantic and 1.4 percent in the Northeast compared with last year. They rose 0.9 percent in the north central part of the country.
 
The West and South posted gains of between 2 percent and 3 percent, still weaker than the 3 percent to 4 percent increases expected by many retail analysts.
 
Online sales, typically a bright spot, grew only 8.4 percent from Oct. 28 through Saturday, according to SpendingPulse. That's a dramatic slowdown from the online sales growth of 15 to 17 percent seen in the prior 18-month period, according to the data service.
 
Online sales did enjoy a modest boost after the recent snowstorm that hit the Midwest, McNamara said. Online sales make up about 10 percent of total holiday business.

  • Delmarvawide NewsDelmarvawide NewsMore>>

  • Dover Wastewater Pump Station Remains Shuttered

    Dover Wastewater Pump Station Remains Shuttered

    Feb 20, 2018 7:09 PM2018-02-21 00:09:00 GMT
    Tuesday, February 20 2018 8:00 PM EST2018-02-21 01:00:11 GMT
    DOVER, Del. --- Public Works crews on Tuesday removed faulty sewer pumps that failed the day prior, shuttering a pump station and prompting around-the-clock maintenance to contain the flow of sewage until repairs can be made.More
    DOVER, Del. --- Public Works crews on Tuesday removed faulty sewer pumps that failed the day prior, shuttering a pump station and prompting around-the-clock maintenance to contain the flow of sewage until repairs can be made.More
  • Man Arrested for Stealing From Cars in Seaford

    Man Arrested for Stealing From Cars in Seaford

    Feb 20, 2018 6:35 PM2018-02-20 23:35:00 GMT
    Tuesday, February 20 2018 6:36 PM EST2018-02-20 23:36:33 GMT
    Delaware State Police have arrested a man in connection with multiple thefts from cars in Seaford.More
    Delaware State Police have arrested a man in connection with multiple thefts from cars in Seaford.More
  • First Eight National Folk Festival Performers Announced

    First Eight National Folk Festival Performers Announced

    Feb 20, 2018 5:30 PM2018-02-20 22:30:00 GMT
    Tuesday, February 20 2018 5:30 PM EST2018-02-20 22:30:56 GMT
    SALISBURY, Md.- The National Folk Festival announced its first group of eight artists who will perform at the event taking place in Salisbury on September 7th-9th this year. The national festival will welcome nearly 350 artists to downtown, including dancMore
    SALISBURY, Md.- The National Folk Festival announced its first group of eight artists who will perform at the event taking place in Salisbury on September 7th-9th this year. The national festival will welcome nearly 350 artists to downtown, including dancMore
  • Most Popular VideosMost Popular VideosMore>>

  • New Waterfront Hotel Breaks Ground in O.C.

    New Waterfront Hotel Breaks Ground in O.C.

    The location of a new waterfront hotel that recently broke ground in Ocean City is raising some eyebrows with neighbors in the downtown area.

    The Cambria Hotel is being built in the vacant lot that sits just north of the Route 50 drawbridge, meaning it will be one of the first things drivers see headed into town.

    More

    The location of a new waterfront hotel that recently broke ground in Ocean City is raising some eyebrows with neighbors in the downtown area.

    The Cambria Hotel is being built in the vacant lot that sits just north of the Route 50 drawbridge, meaning it will be one of the first things drivers see headed into town.

    More
  • Police Search for Vandal Suspects Who Killed Fish

    Police Search for Vandal Suspects Who Killed Fish

    Police are investigating vandalism at Kitty's Flower Shop in Salisbury that occurred around 7:30 Thursday night. The store's outdoor pond was destroyed and several of the fish in that pond were killed.

    More

    Police are investigating vandalism at Kitty's Flower Shop in Salisbury that occurred around 7:30 Thursday night. The store's outdoor pond was destroyed and several of the fish in that pond were killed.

    More
  • Dover Police Announce Death of Officer

    Dover Police Announce Death of Officer

    The Dover Police Department says one of their own passed away yesterday. Corporal Thomas Hannon's death was a result of medical complications brought on after sustaining a leg injury in the line of duty in 2012.

    More

    The Dover Police Department says one of their own passed away yesterday. Corporal Thomas Hannon's death was a result of medical complications brought on after sustaining a leg injury in the line of duty in 2012.

    More
Powered by Frankly

All content © Copyright 2000 - 2018 WBOC. All Rights Reserved. For more information on this site, please read our Privacy Policy, and Terms of Service, and Ad Choices