MONEY AND WORK

News from the Progressive Review, providing alternative news and comment for over four decades.

December 26, 2008

ONE OF THE WORST HOLIDAY BUSINESS SEASONS EVER

Wall Street Journal - Price-slashing failed to rescue a bleak holiday season for beleaguered retailers, as sales plunged across most categories on shrinking consumer spending, according to new data. Despite a flurry of last-minute shoppers lured by the deep discounts, total retail sales, excluding automobiles, fell over the year-earlier period by 6% in November and 8% in December through Christmas Eve, according to MasterCard Inc.'s Spending Pulse unit.

When gasoline sales are excluded, the fall in overall retail sales is more modest: a 3% drop in November and a 4% decline in December. A 40% drop in gasoline prices over the year-earlier period contributed to the sharp decline in total sales. [Retail sales chart]

But considering individual sectors, "This will go down as the one of the worst holiday sales seasons on record," said Mary Delk, a director in the retail practice at consulting firm Deloitte LLP. "Retailers went from 'Ho-ho' to 'Uh-oh' to 'Oh-no.'"

The holiday retail-sales decline was much worse than the already-dire picture painted by industry forecasts, which had predicted sales ranging from a 1% drop to a more optimistic increase of 2%.

Luxury goods, once considered immune from economic turmoil, were hardest hit, with sales falling 21%, compared with a jump of 8% a year ago, when the economy had just begun to sputter. Including jewelry sales, the luxury sector plunged by a whopping 35%.

During the same period last year, overall retail sales rose a modest 2%, helped by late-season discounting that enticed procrastinating shoppers. But this year, after a moderate uptick in shopping activity boosted by steep promotions the Friday after Thanksgiving, shoppers closed their wallets and reopened them only cautiously, worried by job losses, a sinking stock market and a recession climbing into its second year.

0 Comments:

Post a Comment

<< Home