While stronger retail sales in November raised retailers’ hopes for the holidays, it appears that those hopes were disappointed.

retail sales, Thanksgiving, Christmas, Hannukah, National Retail Federation, NRF, Capital Business Credit, ShopperTrak, Bill Martin, IBM Digital Analytics Benchmark

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Inside This Issue - News

Holiday sales not so very merry

January 13th, 2014

NEW YORK – While stronger retail sales in November raised retailers’ hopes for the holidays, it appears that those hopes were disappointed.

Some of the disappointment was simply the result of calendar shifts. There were six fewer shopping days between Thanksgiving and Christmas in 2013, and Hannukah began on Thanksgiving Day, November 28, with the result that pre-Hannukah shopping boosted November’s figures, with a corresponding hit on December’s results.

The National Retail Federation (NRF) reported a 0.6% sequential increase in retail sales excluding auto sales, gasoline and restaurants. On a year-over-year basis, November sales were up 3.9%, in line with the trade group’s forecast of a 3.9% increase for the holidays.

To be sure, expectations were modest going into the selling season. According to Capital Business Credit, a non-bank lender that services the retail sector, 77% of manufacturers and importers surveyed expected the season to be the same or slightly stronger than 2012. Nearly half of the poll’s respondents noted that their orders from retail customers were up over 2012, though.

Aggressive promotions spurred heavy customer traffic during the Thanksgiving weekend, with customer traffic on Thanksgiving soaring 27%, according to the NRF.

While retailers’ deals might have spurred traffic, they may have restrained top-line growth, as NRF estimated that shoppers spent an average of $407.02 from November 28 through Sunday, December 1, a decrease of 3.9% from the same period in 2012.

Shopper analytics provider ShopperTrak estimated that sales for Thanksgiving weekend rose 1% year over year to about $22.2 billion, even though shopper traffic fell 4% to around 1.8 billion store visits.

There were wide regional variations, though: The West led with a 5.5% increase in sales despite flat customer traffic, followed by a 1.8% increases in sales in spite of a 2.3% dip in traffic in the South. The Northeast managed a 1% uptick in sales even though traffic plummeted 9.8%, while the Midwest saw a 2.9% drop in sales as traffic declined 5.4%.

ShopperTrak found both sales and traffic declining on a year-over-year basis in each of the following three weeks up to December 22, with bad weather playing a role in the week of December 16 to December 22. “Bad weather throughout the country kept some shoppers away from stores,” said Bill Martin, founder of ShopperTrak. "Though many did finish making their purchases, retailers did not see as many shoppers as last year."

One big reason they did not is that more consumers opted to do their holiday shopping online. According to IBM Digital Analytics Benchmark, online sales for the period from October 1 through December 31 rose 10.3%. Mobile devices took a huge step up in importance, as sales through smartphones and tablets grew more than 46% and accounted for nearly 17% of all online sales.