Sales this holiday season did not live up to expectations across much of the country, though the South seemed to fare better than other parts of the U.S.
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. The West and South posted gains of between 2 percent and 3 percent.
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.
“What started out to be a pretty promising holiday kind of fizzled out,” said Marshal Cohen, chief analyst at the market research firm NPD Group.
With Superstorm Sandy, the presidential election, the Sandy Hook elementary school shooting and continued discussions about the fiscal cliff, every weekend seemed to have another major distraction, Cohen said. Alone, the issues would not have had an impact on spending. But together, they made a difference.
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.
In Georgia, shoppers redeeming gift cards and large discounts offered by stores could help sales pick up before the end of the year, said Rick McAllister, president and CEO of the Georgia Retail Association. He said Christmas Eve traffic appeared to be slower than he expected, but he still thought sales in Georgia would be up between 3 and 4 percent over last year.
“It’s not a great year, but a good year,” he said.
It was a great year for handbag maker cinda b, whose creative director is in Atlanta. In the weeks leading up to Black Friday and through Dec. 21, sales were up 88 percent, said Art Mandelbaum, president of the company. He attributed the increase to increased awareness of the brand as well as a push to buy locally.
Off Broadway Shoes also had a strong holiday season, said Phil Lamantia, director of operations for the Alpharetta company. Sales were up slightly above what the company had planned, including in the South.
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.
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 are likely to drop in the coming months.
About the Author
