Holiday Sales Tumble as U.S. Consumers Cut Spending

From MarketWatch: Fresh Survey shows gloomy U.S. retail sales
Data released by MasterCard Inc.'s SpendingPulse unit showed total retail sales, excluding automobiles, fell by 5.5% in November over the year-earlier period and by 8% in December through Christmas Eve. 2008 holiday season is going to be one the worst in decades.

Sales of luxury goods, including jewelry, plunged by 34.5%. Excluding gasoline sales, the fall in overall retail sales was more modest, with a 2.5% drop in November and a 4% decline in December.

Retailers went from 'Ho-ho' to 'Uh-oh' to 'Oh-no.'"

Amazon.com Inc. said that the 2008 holiday season finished as its best ever, with over 6.3 million items ordered worldwide on the peak day, Dec. 15 -- a record-breaking 72.9 items per second.

With the U.S. and global economies in recession, consumers have all but frozen their spending on anything nonessential, leading retailers to slash prices deeper and earlier than usual to attract sales during their biggest selling period.

Results have been lackluster to this point, with the International Council of Shopping Centers slashing its December forecast and projecting retailers' worst November-to-December period on record.

From Bloomberg: Holiday Sales Tumble as U.S. Consumers Cut Spending
Consumers spent at least 20 percent less on women’s clothing, electronics and jewelry during November and December, resulting in what may be the biggest holiday-shopping sales decline in four decades.

Discounts of 70 percent off or more by Macy’s Inc., AnnTaylor Stores Inc. and other retailers failed to prevent a spending drop of as much as 4 percent during the final two months of the year, according to data from SpendingPulse. Including fuel, sales tumbled as much as 8 percent. The decline is the worst since MasterCard Advisors started tracking data in 2002 to provide the SpendingPulse service.

The SpendingPulse data follow forecasts of falling sales from industry groups. Sales at stores open at least a year may drop as much as 2 percent in November and December, the International Council of Shopping Centers said on Dec. 23, the worst drop since at least 1969.

From Nov. 1 through Dec. 24, women’s clothing sales dropped 23 percent and men’s fell 14 percent. Combined electronics and appliance sales tumbled 27 percent, with purchases over $1,000 suffering the most. Purchases over the Internet fared better, with a 2.3 percent decline. Historically, Web sales have posted 15 percent to 20 percent year-over-year sales gains.

From CNBC: Retailers Suffer Dismal Christmas Sales

It took massive discounts, longer store hours and promotional giveaways to even get shoppers to the mall this season. Still that last minute rush could not save stores from double-digit sales declines across virtually every category. Sales above $300 were at a virtual standstill.

That weak spending through Christmas Eve brought overall holiday sales to levels unseen since the 1980s. The results are well below the plus 2.2 percent forecast made by the National Retail Federation in September.

The high-end stores were hit the hardest. Jewelry, handbags and other luxury items sat on shelves. Luxury results through December 24th were down minus 34.5 percent. Stripping out jewelry, sales dropped minus 21.2 percent. When shoppers did splurge, they mainly spent in the $500 to $800 range. How they buy will determine whether some stores have enough cash to survive through 2009.

From Yahoo! Finance: Retailers slash prices to entice holiday shoppers
But with gift card sales down this holiday season and consumers looking to save money rather than spend it, even the big discounts may not be enough to salvage what looks to be one of the most dismal holiday shopping seasons in years.

"The last week of December represents about 14 percent of Christmas sales," said C. Britt Beemer, chairman of America's Research Group. "You can't save a season with only one-seventh of the sales to go." The holiday season -- which typically accounts for 30 percent to 50 percent of a retailer's annual total sales -- has been less than jolly for most retailers.