CE Holiday Sales Up 6%: MasterCard

By Alan Wolf -- TWICE, 12/28/2009

Purchases, N.Y. - A last-minute rush of holiday shopping and an extra calendar day before Christmas helped push retail sales of consumer electronics up 6 percent between Black Friday and Dec. 24, according to a report by MasterCard.

The company's SpendingPulse study, based on MasterCard purchases, consumer surveys, and estimates of cash and check payments, shows that CE sales began to slow in the first two weeks of December following a strong November, when pre-Black Friday sales events were launched as early as the first week of the month.

CE sales from Nov. 1 through Dec. 24 were up 5.9 percent year over year, although adjusting for the extra shopping day could decrease the results by anywhere from 2 percent to 4 percent, MasterCard's Advisors consultancy division said.

Margins Take A Holiday, But CE Sales Grow Holiday Price Watch

But the calendar effect could be offset by a surge in post-Christmas sales, as retailers attempted to blow out remaining holiday inventory with additional price cuts, and consumers responded in kind. Deals included a 10.1-inch Lenovo netbook that sold for $197 on Christmas Day at BestBuy.com, and an Xbox 360 Elite bundle with two games and a $50 gift card for $299 this week at Walmart.

Market research firms are expected to publish post-Christmas sales results later this week.

Meanwhile, the National Retail Federation is holding to its earlier forecast of a 1 percent decline in total holiday spending, although Michael McNamara, research and analysis VP for SpendingPulse, believes seasonal sales were more robust. "Overall this year, we have seen increasing stability in spending, as opposed to the free-fall of 2008," he said.

McNamara also said pricing across all product sectors held up this season, compared to "the broad emergency discounting" in 2008. However, CE merchants said steep price promotions, on top of previously eroded retails, kept dollar volume down despite solid single-digits increases in unit sales. Buying groups have reported holiday revenue results ranging from slightly down to up by the mid-single digits, and the Consumer Electronics Association (CEA) previously projected a 6 percent decline in fourth-quarter CE revenue against a 6 percent increase in unit sales.

Perhaps the biggest winner this season is the online channel. Helped by several major winter storms that disrupted brick-and-mortar traffic, e-commerce sales rose 15.5 percent during the Nov. 1 - Dec. 24 period, and have been up 18 percent since Black Friday, the SpendingPulse report showed.