The 2013 Christmas shopping season – Huge discounts, slow brick-and-mortar traffic and net sales
posted at 5:50 pm on January 8, 2014 by Steve Eggleston
Reuters has the first post-mortems of the 2013 Christmas shopping season, and the news is not good from the brick-and-mortar segment:
U.S. retailers posted their lowest holiday sales growth in four years after shoppers stayed at home despite some of the biggest discounts and promotions since the recession, retail industry tracker ShopperTrak said.
Retail sales between Thanksgiving and Christmas rose 2.7 percent, compared with 3.0 percent a year earlier, while the number of people walking into stores across the United States declined 14.6 percent, ShopperTrak said.
“Not only were people more promotional this year, giving away more margin, but it didn’t generate the incremental traffic they would have expected,” said Cowen & Co analyst John Kernan.
ShopperTrak does not count online sales, which were at record levels early in the shopping season. While the National Retail Federation thinks the online component will raise its measure of holiday sales increase to 3.9% when it issues its report on Tuesday, my pessimism from last month seems to be buttressed by the rest of the Reuters story:
In a sign of how tough the season was, J.C. Penney Co Inc said on Wednesday it was “pleased” with its holiday season sales without giving specific results, prompting many on Wall Street to say the department store chain’s sales may have declined last month….
Online spending also fell below estimates. According to data firm comScore (SCOR.O), U.S. online retail spending rose 10 percent to $46.5 billion in the November-December 2013 holiday season, below the 14 percent growth it had forecast.
Assuming the National Retail Federation uses essentially the same numbers as ShopperTrak and comScore, I would expect total Christmas season sales to increase by only 3.7%.
Meanwhile, the subject of private-sector inventories and its effect on 4th-quarter GDP came up during the ADP conference call with Moody’s Analytics chief economist Mark Zandi (via BizzyBlog). If you recall, 1.67 percentage points of the 3rd-quarter 4.1% real GDP growth was a result of increased inventories, with growth of non-farm inventories accounting for 1.55 percentage points of that. Zandi is expecting only a slight drop in the contribution of increased inventories to the 4th-quarter GDP. That’s another sign that following 4 years of “Recovery Summer”, there hasn’t really been a recovery at all.