Holiday Sales Fall Short Of Estimates

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The New York Sun

The last-minute Christmas shopping crunch was not enough to salvage consumer-spending numbers for the season. Retail sales, after factoring out surging gas prices, fell short of estimates, growing just 2.4% from the day after Thanksgiving through midnight Monday, according to SpendingPulse, a unit of MasterCard Advisors.

Overall sales, including gas prices — which have skyrocketed more than 30% since last year’s holiday season — rose 3.6% during the holiday season. This is at the low end of industry forecasts of a 3.5% to 4.5% gain in consumer spending.

“The surge at the beginning of the season and the surge at the end of the season definitely resulted in the modest growth that we saw,” a vice president of research and analysis for MasterCard Advisors, Michael McNamara, told the Wall Street Journal yesterday. “If we didn’t have those surges, it would have been a negative story.”

The MasterCard figures echo findings from research firm ShopperTrak RCT Corp., which published retail sales figure late Monday. It found that total sales on Saturday reached $9.36 billion, a 7.6% increase over the same day a year ago. That surge will put stores on track to at least meet its forecast of a 3.6% sales gain for the season, it said.

The National Retail Federation, the industry’s trade association, is estimating a growth forecast of 4% for this holiday season. While this is more bullish than MasterCard or ShopperTrak, it is below the 4.6% growth last year and the 4.8% average over the last decade. Meanwhile, the nation’s second-largest retailer, Target Corp., warned that its sales might have fallen this month. The company cut its sales projections Monday, estimating comparable store sales for the five weeks ending January 5 to be between a 1% increase and a 1% decrease, from the 3% to 5% increase it had previously forecast. The company is expected to report its actual sales on January 10.

The MasterCard figures, which provide a broad gauge of consumer spending habits, showed a steep drop in women’s apparel, with spending down 2.4%. The category had been down 5.7%, but was boosted by a surge in sales over the past three weeks. The luxury category also posted a 1.9% decline, although when jewelry sales were factored out, luxury numbers rebounded, posting a 7.1% gain. Menswear increased 2.6%, while footwear sales jumped 6%. The numbers from MasterCard’s SpendingPulse unit, which includes sales from in stores and online, is based on MasterCard payments and estimates for payments made by cash and checks. It may be that consumer spending will increase in the wake of post-Christmas sales, Mr. McNamara told the Wall Street Journal: “This last week of December, I wouldn’t be surprised if we see upwards of $60 billion spent.”


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