Holiday Retail Tally At Soft End
U.S. retailers saw sales rise 3.6 percent in holiday shopping, at the lower-end of expectations and were helped by a late-season spending surge on some items, according to data released Tuesday by SpendingPulse.
The figures, from the retail data service of MasterCard Advisors, offer a glimpse at the strength of the 2007 holiday shopping season, which was expected to grow at the slowest rate in five years, as U.S. consumers face a housing slump, a credit crunch and higher prices for food and fuel.
"It's more at the lower end of the expected range but more or less in line with the reduced expectations coming into the holiday season," Michael McNamara, vice president of Research and Analysis for MasterCard Advisors, said.
SpendingPulse, a report released by MasterCard, had projected spending to rise 3.5 percent to 4.0 percent over last year's holiday season.
Economists and policy makers have been closely monitoring the U.S. consumer, a sector increasingly seen as the savior that could keep the U.S. economy from slipping into a recession. Some analysts expect U.S. gross domestic product (GDP) to weaken in the fourth quarter and show either no expansion or up just by 1 percent.
"If you were looking for this holiday season to kick-start a new acceleration of growth, you'll probably be disappointed," McNamara said.
The last two weeks did show signs a late-round spending surge, McNamara said.
SpendingPulse said sales at U.S. specialty apparel chains, which include Gap , Aeropostale and Urban Outfitters , rose 1.4 percent over last year, a slight improvement from the anemic 0.5 percent seen at mid-season.
The results measure the crucial shopping period from the Friday after Thanksgiving through midnight Dec. 24. They are adjusted for the 32 days included in this year's period compared with the 31 days in 2006.
Women's clothing sales fell 2.4 percent, but showed that sales made up some ground having been down 5.7 percent at mid-season.
On the other hand, sales of men's clothing rose 2.3 percent but had been up by 4.5 percent at mid-season. McNamara said that so far, there is no compelling evidence that retailers cut prices more than they did last year.
Consumer electronics, which includes popular gift items such as Apple iPods, laptop computers, flat-screen televisions, and also appliances rose 2.7 percent.
SpendingPulse tracks sales activity in the MasterCard payments network and couples it with estimates for all other payment forms.
Online shopping saw the greatest growth, up 22.4 percent. Sales of luxury items, excluding jewelry, grew 7.1 percent. However, including jewelry, sales fell 1.9 percent. Footwear also did well, up 6 percent.
The results do not include the post-Christmas spending activity, which has been growing with the popularity of gift cards, which are typically redeemed after Christmas and post-holiday sales.
Last year, shopping during the seven days after Christmas reached $58 billion, McNamara said, and has been running at about 15 percent to 16 percent of the post-Thanksgiving season for the past four years.
"I wouldn't be surprised if we crack $60 billion," he said. "It's becoming a more important period."