WASHINGTON (PNN) - December 26, 2012 - Fascist Police States of Amerika shoppers spent cautiously this holiday season, a disappointment for retailers who slashed prices to lure people into stores and now must hope for a post-Christmas burst of spending.
Sales of electronics, clothing, jewelry and home goods in the two months before Christmas increased 0.7% compared with last year, according to the MasterCard Advisors SpendingPulse report.
That was below the healthy 3%-4% growth that analysts had expected - and it was the worst year-over-year performance since 2008, when spending shrank sharply during the Great Recession, which evolved into the ongoing Second Great Depression. In 2011, retail sales climbed 4%-5% during November and December, according to ShopperTrak.
This season’s weak sales could have repercussions for 2013. Retailers will make fewer orders to restock their shelves, and discounts will hurt their profitability. Wholesalers will buy fewer goods and orders to factories will likely drop in the coming months.
Holiday sales are a crucial indicator of the economy’s strength. November and December account for up to 40% of annual sales for many retailers. If those sales don’t materialize, stores are forced to offer steeper discounts. That’s a boon for shoppers, but it cuts into stores’ profits.
Spending by consumers accounts for 70% of overall economic activity, so the eight-week period encompassed by the SpendingPulse data is seen as a critical time not just for retailers but for manufacturers, wholesalers and companies at every other point along the supply chain.
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. A clearer picture will emerge next week as retailers like Macy’s and Target report revenue from stores open for at least a year. That sales measure is widely watched in the retail industry because it excludes revenue from stores that recently opened or closed, which can be volatile.
