Early Shopping Figures Show Modest Growth
MasterCard survey shows only 3.6 percent growth.
Dec. 26, 2007 — -- In the final days before Christmas, shoppers took to the stores and spent money on last-minute gifts, boosting holiday sales but perhaps not the holiday spirits of the nation's retailers.
From the day after Thanksgiving to Christmas eve, sales rose 3.6 percent compared to last year, according to MasterCard SpendingPulse, a division of MasterCard Advisors, which calculates spending for all forms of payment.
By comparison, in 2006 and 2005, MasterCard Advisors reported that sales increased 6.6 percent and 8 percent respectively.
"Overall, sales came in just above the lower end of the range we were expecting, maintaining the slower, modest growth we've been seeing throughout the year," wrote Michael McNamara, vice president of research and analysis for MasterCard Advisors in a press release. He added, "Most industry observers had adjusted their sights down, but anyone who was looking for this holiday season to kick-start a new wave of growth would find these numbers falling short of expectation."
But even this sales increase, on the lower end of the research group's estimate in November, would have been even smaller were it not for higher gasoline prices. During the shopping period, gasoline prices were at least 30 percent higher compared to last year. Removing the extra money consumers spent at the pump would have left retailers with a dismal 2.4 percent increase in sales compared to last year.
Analysts expect more discounting and big sales the day after Christmas through the new year as people redeem gift cards and retailers try to move out holiday items and replace them with newer goods for sale.
Apparel: While apparel sales overall increased 1.4 percent, women's apparel was a big loser, dropping 2.4 percent, compared to last year. The loss reflects the general consensus among analysts and fashion experts that there was no "must-have" item for women's clothing this season. But if there is any positive spin, overall sales were better than expected compared to the midseason report for which reported women's apparel down 5.7 percent. Men's apparel was up 2.3 percent and footwear was up 6 percent.
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