It wasn’t the holiday shopping season retailers were hoping to unwrap.
The Associated Press reported U.S. shoppers were in a subdued mood the last weekend before Christmas and spent cautiously this year, disappointing retailers who began discounting prices to attract them into stores.
Jon Belcher, manager at Mar-Jons Sportswear in the Westgate Mall, witnessed the trend of a strong early start to the holiday gift-buying season before it appeared to be curtailed deeper into December.
Sales in November and December on electronics, clothing, jewelry and home goods increased 0.7 percent compared to 2011, MasterCard Advisors SpendingPulse reported. Analysts earlier predicted a 3 to 4 percent increase this year.
That didn’t happen.
In late December, Chicago-based ShopperTrak — which monitors retail foot traffic — lowered its holiday sales expectations to a 2.5 percent increase compared to 2011. At 2.5 percent, it would have marked the first increase in holiday retail foot traffic since the recession. In September, ShopperTrak predicted a 3.3 percent increase in holiday sales compared to last year.
Instead, this year’s increase marked the worst year-over-year performance since the depths of the Great Recession in 2008, The Associated Press reported. Last year, retail sales rose 4 to 5 percent in the last two months of the year. The final week of December can account for about 15 percent of the month’s sale. The day after Christmas is often on the top 10 list of biggest shopping days of the year.
Mar-Jons has been part of the Westgate Mall for 28 years. Belcher said there were days in later December that looked more like January, a historic slow period.
The International Council on Shopping Centers (ICSC) reported chain stores had a strong Black Friday week, but a modest 1.7 percent growth in sales for November compared to the previous year.
It all started out on a brighter note.
In November, the ICSC reported consumers were upbeat about their holiday spending plans.
A Brainerd Dispatch online poll asked consumers if they planned to spend more this year than last year, about the same or less. It’s a small sampling, but respondents echoed what’s being reported nationally about shopping trends — 69 percent planned to spend less.
Retailers were busy outlining sales and discounts for after-Christmas sales hoping to bring in shoppers with gift cards or unmet gift lists. Advertising, emails and smartphones all had store information to draw shoppers back to stores before year-end.
Walmart in Baxter reported a steady day Thursday with returns, gift cards and shoppers looking for discounts and Christmas markdowns. The giant retailer reported it had normal staffing for the day.
Other stores were treating the day-after Christmas as a doorbuster day by opening early and offering time-sensitive sales until early afternoon. Kohl’s opened at 5 a.m. telling customers to stock up for next year on sales of 60-70 percent off.
J.C. Penney in Baxter opened at 7 a.m., three hours earlier than normal. Store manager Kay Pihlaja said the morning started slower — as people likely slept in or returned to work — but it was busier by afternoon.
Pihlaja said she couldn’t comment about sales data for the holiday season, but said the button promotion giving shoppers a chance at winning prizes with purchases was successful and produced local winners.
The ICSC-Goldman Sachs holiday spending intentions survey for 2012 had almost a quarter of consumers planning to spend more this year than last year. Most consumers, at 53.5 percent in the survey, planned to spend about the same. And 35.4 percent planned to spend less or substantially less on holiday gift buying this year.
Gift cards, toys and games, CDs, DVDs and books, and clothing were what people said they planned to shop for during a 32-day shopping season — the longest possible span between Thanksgiving and Christmas.
Sales in November and December account for up to 40 percent of annual sales for many retailers, the AP reported, with consumer spending accounting for 70 percent of economic activity, making the holiday spending period critical for manufacturers and wholesalers in addition to retailers.
A SpendingPulse report, which is released by MasterCard, found a spending slowdown after the week of Dec. 8.
There were many factors listed by analysts, including Superstorm Sandy, weekend winter storms, the tragedy in Connecticut and concerns generated about the government’s ‘fiscal cliff.’
“A lot of the Christmas spirit was left behind way back on Black Friday weekend,” said Marshal Cohen, chief research analyst at the market research firm NPD Inc. in a report by The Associated Press. “We had one reason after another for consumers to say, `I’m going to stick to my list and not go beyond it.”’
Online sales grew 8.4 percent from Oct. 28 through Saturday, according to SpendingPulse. That’s a dramatic slowdown from the online sales growth of 15 to 17 percent seen in the prior 18-month period, according to SpendingPulse.
At Mar-Jons, Belcher said a lot of his store’s business depends on the popularity of a team’s success. A downturn was definitely felt with the lack of play by the National Hockey League.
“We haven’t sold any Wild stuff,” Belcher said.
A late surge by Viking Adrian Peterson helped. Winter storms on Black Friday and subsequent Saturdays in December hurt. Belcher said Dunham’s addition to the mall also cut into Mar-Jons’ sales but local business in high school letter jackets remains strong.
“We had a very good year with that bright spot,” Belcher said.
In 2011, the 10 days before Christmas generated almost $147 billion in retail sales volume or nearly 24 percent of the holiday shopping season, SpendingPulse reported.
For consumers, a slower holiday shopping season means the last days of December may provide additional discounts to get desired items not under the tree this year or to get a head start on next year’s gift buying with the benefit of sale prices. Whether that will save the season for retailers remains to be seen.