Despite huge lines recorded on Black Friday, the U.S. retailers understood that Americans were not so keen on opening their wallets during the 2012 holiday shopping season. Cautiousness of American customers resulted in the worst holiday shopping season since 2008 when the country entered a recession. Analysts note that weather conditions and concerns over the economy including the fiscal cliff were the main factors of unsatisfactory results of U.S. holiday sales.
Gloomy holiday sales
On the 25th of December, data released by MasterCard Inc.’s SpendingPulse unite, showed that sales between the 28th of October and the 24th of December rose only 0.7 percent, compared to the same period a year ago. Experts had estimated that U.S. holdiays sales would climb between 3 percent and 4 percent. The growth of 0.7 percent is well below the initial forecasts. But those results came not long after ShopperTrak decided to downgrade its 2012 holiday growth forecast to 2.5 percent.
According to data, the growth in holiday sales is the worst since 2008 when U.S. saw sales drop between 2 and 4 percent as the financial crisis just started. In 2011, the U.S. holiday sales climbed between approximately 5 percent. Analysts believe that an increase of 4 percent is satisfactory for an economy.
More interestingly, online sales for the holiday season increased by almost 8.5 percent to $48 billion, according to SpendingPulse. The figures are disappointing as the online sale increase of 15 to 17 percent was witnessed in the last 18 months.
Retailers saw holiday sales grow were lower-than-expected as American customers were cautious about their spending due to fiscal cliff, Superstorm Sandy and other factors. Analysts underline that if Americans remain unwilling to buy, U.S. economic growth will certainly weaken in 2013.
Hope dies last
Even though recent data is not too optimistic, retailers have still time to catch up with their initial goals as the final week of December comprises approximately 15 percent of the month’s sales. With coming discounts retailers hope that they would not only sell off their products but also at least soften data on holiday sales.
Some still believe that hope dies last, but Michael McNamara, Vice president MasterCard SpendingPulse at MasterCard Worldwide, does not think that the last week would change a thing in disastrous results. On the other hand, there are also those who are convinced that discounts of 75 percent to 80 percent will be able to get customers in spending mood.
U.S. retailers do not want to give up despite discouraging holidays sales as holiday spending accounts for approximately a quarter of their annual revenue. But what is even more discouraging is the fact that these U.S. holiday sales might have consequences for 2013 as retailers will make fewer orders, not to mention that all discounts will certainly affect financial results. And that means that also factories and other companies will be affected.