For many retailers, December truly was the most wonderful time of the year.
A new report from MasterCard Advisors' SpendingPulse, which estimates sales across all payment forms, shows strong sales growth in December for apparel and high-end items, including jewelry. Online sales were also very strong, perhaps helped by wet weather in West and a post-Christmas blizzard in the Northeast.
Even electronics and appliance sales, which have been under pressure from lower prices for flat-panel televisions and laptop computers, eked out a 1.2 percent sales gain for the month.
"In general, most retailers have to be pretty pleased about how things turned out for the holiday season as it is likely that it was as they expected, or perhaps a bit better than they expected," said Mike Berry, director of Industry Research for SpendingPulse.
ECommerce sales rang up a 17.6 percent gain in December, Berry said. Online sales were strong throughout the holiday season, as promises of guaranteed shipping and generous offers, including free shipping, lured consumers online.
Then, online sales got another bump as a blizzard in the Northeast, which hit the region on the day after Christmas, prompted a fresh round of shopping late in the month.
For brick-and-mortar retailers, the blizzard likely had only a "slightly negative impact," Berry said, explaining that the last time Dec. 26 fell on a Sunday, the day accounted for about 2 percent of the total sales for the month.
"It's not a particularly important day," he said.
For the most part, weather had a positive or neutral effect on sales for the holiday season. Cooler weather may have helped drive sales of seasonal apparel, but consumers clearly released some of the "pent-up demand" that had been building after months of belt-tightening.
Apparel sales rose 10.9 percent in December with strong sales across all categories, Berry said.
Sales of women's apparel rose 6.1 percent, which was the highest year-over-year growth rate for the sector during 2010, Berry said. This is especially significant given that sales in December tend to be the most important month of the year.
Also, clothing sales did not appear to be driven by discounting. SpendingPulse's apparel price index showed apparel prices were 2.2 percent higher than last year during the same period.
"This suggests that retailers were managing inventory to meet demand, and not having to lower prices in order to move merchandise," Berry said.
One exception may have been for men's apparel, where sales rose 9.9 percent, but the price index fell 2.5 percent. Still, the growth rate was very "substantial" for the category compared with how sales trends have been for men's apparel, he said. For much of the year, sales of men's apparel have been flat to down.
Sales of luxury items, excluding jewelry rose 8.5 percent, while jewelry sales climbed 10.4 percent, Berry said.
According to SpendingPulse, jewelry sales were driven by sales of higher ticket items and by sales at independent jewelers, many of which are skewed to the high-end.
More affluent consumers have been loosening up their purse strings in recent months. As gains in the stock market, and improvement in the economy have made them feel more comfortable spending again.
Still, questions still linger about how spending will be in the coming months.
"You'll recall that there was a blip up in the first quarter of last year that didn't sustain itself," Berry said. He added that last year's sales momentum in the first quarter will also make comparisons with the year-ago period more challenging for retailers.
Also, January and February are not big months on the retail calendar, Berry said.
That said, the momentum retailers are seeing coming out of the 2010 holiday season does appear to be more broad-based that the momentum that built up after 2009, which could bode well for consumer spending this year.
One area to watch is department stores. SpendingPulse said department store sales fell 1.5 percent from last year, however, within the category there are some individual chains that are doing well.
The department store category includes a broad-range of department stores from high-end chains such as Nordstrom and Saks
to Macy's , J.C. Penney and Kohl's , among others.
Questions? Comments? Email us at email@example.com