Sales Sluggish In Home Stretch
by Alan Wolf -- TWICE, 12/17/2007 7:38:00 AM
New York — Two new reports on holiday shopping confirm what dealers and distributors have been informally telling TWICE: that seasonal sales have been spotty compared to past years.
A mid-season holiday shopping update released today by MasterCard Advisors indicated the consumer electronics sales slowed during the first two weeks of December following a growth surge on Black Friday. While CE spending has been up 5.8 percent in the 20 days since Thanksgiving, the pace represents “a pronounced slowdown” from the 15 percent growth the sector saw during Thanksgiving Weekend, the group said.
“Not surprisingly, Black Friday’s sales came in so strong that the pace was clearly not sustainable,” said Michael McNamara, research and analysis VP for MasterCard Advisors. “We are watching closely to see what the last 10 days brings.”
So far the news isn’t promising. A survey conducted this past weekend by America’s Research Group (ARG) indicated that weekend shopping levels across the board were the lowest in over six years, prompting the marketing firm to lower its holiday forecast from a 2 percent increase in retail sales to 1.8 percent.
ARG founder/chairman Britt Beemer attributed the softer shopping levels to a dearth of deep discounting, as merchants seek to avoid the margin impact of past years’ promotions. “Retailers are holding back on giving the big discounts that consumers want this year,” he said, “and as a result retail sales are very weak. I have to conclude that retailers don’t try to understand today’s consumer as they focus on Wall Street and their share value.”
The survey data showed that more than half of those consumers who had yet to finish their holiday shopping said that not getting 50 percent to 60 percent off in sales has impacted their purchasing behavior. Of those not finished, 53.4 percent said they are usually much further along with their holiday purchases by now.
Other factors affecting holiday traffic were last week’s severe winter weather across much of the nation, along with higher fuel prices and tighter credit. Indeed, of the 23 percent of respondents who said they intend to shop less this year, 33.2 percent said the number one factor is higher gas prices while 20.1 percent cited a tighter credit market.
Other results from the survey showed that:
- the top five gifts this Christmas are toys (36.1 percent), electronics (23.9 percent), gift cards (23.8 percent), children’s clothes (15.9 percent), and video games (15.3 percent);
- the top five stores for shopping this past weekend were Wal-Mart (33 percent), JCPenney (20.7 percent), Sears (20.4 percent), Target (16.8 percent) and Best Buy (12.9 percent), with Toys “R” Us (12.6 percent) in sixth place; and
- nearly two in three consumers (63.2 percent) shopped at Wal-Mart, with the top five gifts purchased there being toys (45.8 percent), electronics (18 percent), video games (16.2 percent), DVDs (15.9 percent) and children’s clothes (14.2 percent).
The study consisted of 800 interviews conducted Saturday and Sunday, Dec. 15 and 16.
