Inside This Issue - News
Holiday selling season fizzles
January 14th, 2013
NEW YORK – Viewed from any angle, the holiday selling season that ended two weeks ago was at best a disappointment, more realistically a disaster, for America’s mass retailing community.
Nothing seemed to work as it was supposed to. Retailers who opened their stores earlier or kept them open later or longer saw very little impact on sales. Indeed, while a number of shoppers came on Thanksgiving evening to those stores that reopened after dinner, many of those same shoppers stayed home on what has, for some inexplicable reason, become known as Black Friday.
The fact that Christmas day fell on a Tuesday, a reliably good omen in the past — it did offer last-minute shoppers an extra day to shop — made no difference this year. Nor did the longer, by two days, holiday selling season.
Rather, these usually reliable indicators were overshadowed and overwhelmed by an economy that continued to flounder, the consumer’s lingering sense of uncertainty amid the ongoing “fiscal cliff” debate, and the gathering momentum of the Internet, which recorded its strongest holiday selling season yet.
That left mass retailing with little to do but pick up the crumbs. These included a record-setting year for gift card sales as consumers chose to play gift-giving safe by leaving the choice to the recipient. They also included, especially at the nation’s drug chains, a healthy business in greeting cards and assorted trim-a-tree paraphernalia — America decked itself out in all the trappings of Christmas this year, even if the more substantial and expensive business of gift-giving was often absent.
Elsewhere, sales were lackluster, at best. Electronics did what electronics usually do. They sold reasonably well — but not as well as they did online. Apparel sales were mixed. Holiday go-alongs — candy, snacks, etc. — turned in acceptable sales. But the sizzle, the big item, the blockbuster product — these were nowhere to be found in the bricks-and-mortar retail community.
As a result, discount store sales for the 32 days between Black Friday and Christmas Eve rose a scant 3.9%, while same-store sales hardly advanced at all, climbing just 1.7%. For the supermarket segment, results were equally disappointing: a total sales increase of 2.9%, a same-store sales gain of 1.3%.
In light of this performance, mass retailers were left with little to do but revisit and reevaluate strategies that were once viewed as unassailable. When should stores open around the Christmas selling season? When have customers had enough — of the expanded hours, the never-ending sales, the excessive out-of-stocks and unacceptable housekeeping mess in the aftermath of expanded hours? When have employees had enough — of being asked to work on Thanksgiving, of giving up weekends before the Christmas holiday, of putting in hours that apparently never stopped expanding?
Even the Internet appeared overloaded with messages and offers for perhaps the first time. Nowhere was this more true that at Walmart, where online messages kept coming nonstop, sometimes as many as a half-dozen in a 24-hour period. And indeed, Walmart recorded healthy online sales during the holiday selling season. Just not as healthy as those that Amazon recorded.
Amid all the clutter was the incessant beating of the department and specialty store drum, this one announcing nonstop sales, nonstop hours, nonstop reasons to keep shopping. All to little avail. Some promotions worked, others did not. Crowds, reflecting this barrage, sometimes came but more often stayed away.
So, in a sense this Christmas was a watershed season — not in terms of results but in the realization that many of the things that worked in the past are no longer working. And perhaps the time has come to ring in the new and ring out the old.