Post-Holiday Sales To Slide: Forecast

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Charleston, S.C. - A surge in credit-card spending during the holiday selling season could lead to one of the biggest retail hangovers on record this month and next.

According to market research firm America's Research Group (ARG), post-holiday sales are expected to plunge to some of the lowest levels in years as consumers begin receiving their bills for last month's splurges.

The increase in charge-card usage over the holiday period follows three years of credit restraint as consumers began reducing household debt. As a result, "Shoppers will cut back in a very significant way relative to January and February of the last few years," said ARG chairman Britt Beemer, which could have a negative impact on the critical Super Bowl TV-selling period.

Beemer said Black Friday was so huge a draw that a record 44 percent of Americans said they exceeded their spending limit, which is much higher than the 15 percent and 16 percent levels that preceded major drops in credit card usage over the last two years.

Beemer also blamed online spending for the spike in credit card debt, as e-commerce sales, which are almost entirely credit-card driven, rose from 16 percent to 26 percent.

"Unless consumers see '70 percent off' they will be holding back in January and in February and possibly into the spring," he said.

That, combined with a record number of consumers who said they are living paycheck to paycheck, makes this the worst economic picture in ARG survey history, Beemer said.


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