Holiday Retail Sales Were Weak According to SpendingPulse

SpendingPulse has released preliminary retail sales data for the 2008 holiday season, and it ain't pretty.

According to their report, they expect total retail sales to be down between 5.5 - 8% from a year ago.

If you back out gas and auto sales, overall sales are still down between 2-4% from a year ago at this time. SpendingPulse is a division of Mastercard Advisors that tracks sales that are paid for by credit card, checks and cash.

The complete sales numbers won't be known until the first week of January when retailers themselves report their numbers. One thing is for certain though - this will end up being the worst holiday retail season since 1969.

One of the lone bright spots was food sales - no matter what the economic climate is, Americans love to eat during the holiday season. The dire economic situation that we find ourselves in doesn't seem to be impacting the appetites of many Americans.

Other than that though, things were pretty appalling for retailers. Certain segments of retail sales were absolutely destroyed compared to last year.

Take luxury goods. Total sales of luxury goods were down 34.5% from last year. That is an incredible drop.

Sales of electronics and appliances were down 26.7%.

Clothing sales didn't fare much better.

Women's clothing sales were down 22.7%, and men's clothing sales were down 14.3%. Footwear sales were down 13.5%.

Absolutely unbelievable drops. I'm not aware of anyone who was predicting that electronics and appliances sales would be down more than 26% from last year. Keep this data in mind if you are looking to add the stock of certain retailers to your portfolio in 2009. It could be a VERY rough year for certain retailers. American consumers are clearly putting a stop to any non-essential purchases until the economic climate starts to improve in the country.

Retails suffered from a perfect storm of problems this holiday season. Americans are worried about the economy, and many have had their net worths obliterated in 2008. Falling real estate prices and a 30-50% drop in major market indexes have left people feeling much poorer than they did last year. On top of that you have rising unemployment and general unease over the future of the American economy.

To top it all off, major winter storms wreaked havoc in many major American cities right before Christmas, forcing many shoppers to stay indoors.

This was not a good holiday season for retailers, and I would expect to hear some pretty nasty news over the next couple of weeks.

Filed under: General Knowledge