Retailers' holiday sales plummet
NEW YORK (Reuters) - Retailers' sales fell as much as 4 percent during the holiday season, as the weak economy and bad weather created one of the worst holiday shopping climates in modern times, according to data released on Thursday by SpendingPulse.
The figures, from the retail data service of MasterCard Advisors, show the 2008 holiday shopping season was the weakest in decades, as U.S. consumers cut spending as they confront a yearlong recession, mounting job losses and tighter credit.
"It's probably one of the most challenging holiday seasons we've ever had in modern times," said Michael McNamara, vice president of Research and Analysis at MasterCard Advisors.
"We had a very difficult economic environment. Weather patterns were not favorable toward the end of season, and that resulted in one of the most challenging economic seasons we've seen in decades."
The figures exclude auto and gas sales but include grocery, restaurant and specialty food sales. Although SpendingPulse did not exempt the food prices, McNamara said the decline would have been steeper without them.
"There's a lot of food that provide a buffer for the total retail sales numbers," he said.
SpendingPulse tracks sales activity in the MasterCard Inc payments network and couples that with estimates for all other payment forms, including cash and checks. It has been tracking holiday spending figures since 2002. Exact comparisons beyond that year are difficult because of changes in measurements.
The holiday shopping season typically runs from the day after U.S. Thanksgiving, which occurs on the fourth Thursday of November, until Christmas Eve. But this year Thanksgiving was a week later than last year.
To benchmark a comparison, SpendingPulse measured the season from November 1 through December 24. Sales fell 2 percent in November and 4 percent from December 1 through December 24, according to SpendingPulse.
The holiday sales season can account for up to 40 percent of a retailer's annual revenue.
Sales at specialty apparel retailers like Gap Inc and Abercrombie & Fitch Co fell 19.7 percent this year, SpendingPulse said. When factoring in department store results, sales fell about 20 percent, McNamara said.
Women's apparel sales fell 22.7 percent; men's clothing sales were off 14.3 percent, and footwear sales fell 13.5 percent, SpendingPulse said.
This year, the higher the price, the more consumers did without, SpendingPulse said. Sales at specialty electronics and appliance chains such as Best Buy Co Inc fell 26.7 percent, it said.
Luxury sales, which include sales at high-end department stores, leather goods boutiques, pricier jewelry stores and restaurants, fell 34.5 percent, SpendingPulse said. Excluding jewelry, sales fell 21.2 percent.
"There's a much different bonus environment, especially in New York and the financial services industry," McNamara said, of the traditional luxury good customer base.
"But also, the deteriorating employment figures across multiple industries across the country look like they're having a more significant impact at the higher end," he said.
Online sales benefited from the bad weather seen in the northern United States within the last two weeks of the season. E-commerce sales ended down 2.3 percent, but rose 1.8 percent in the final two weeks of the holiday season.
Nearly all retailers -- from department stores such as Macy's Inc and J.C. Penney Co Inc to specialty apparel chains like Aeropostale Inc and AnnTaylor Stores Corp -- offered aggressive discounts this holiday season to lure reticent shoppers.
SpendingPulse results do not include the post-Christmas spending activity, which has been growing with the popularity of gift cards that are typically redeemed after Christmas and post-holiday sales.
(Editing by Leslie Gevirtz)
(Reporting by Ilaina Jonas)
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