/ 27 December 2007

US holiday sales disappoint, even in online world

Despite the last-minute shopping frenzy, holiday retail sales were sluggish as the United States consumer spent less than expected while internet shopping slowed down. Many shoppers waited until the last moment to buy gifts for Christmas, as only 18% of Americans had finished their holiday shopping in mid-December.

Despite the last-minute shopping frenzy, holiday retail sales were sluggish as the United States consumer spent less than expected while internet shopping slowed down.

Many shoppers waited until the last moment to buy gifts for Christmas, as only 18% of Americans had finished their holiday shopping in mid-December, according to the International Council of Shopping Centres (ICSC).

Weekly chain store sales rose 2,8% in the week ending December 22, according to ICSC and UBS Securities.

But sales rose a disappointing 3,6% between the late November US holiday of Thanksgiving and Christmas, according to MasterCard Advisors. Clothing sales went up 1,4% while electronics went up 2,7%. And internet sales slowed down to 22,4%.

”Excluding just the gas purchases, holiday sales rose a lacklustre 2,4%,” said Barry Ritholtz, chief analyst at Ritholz Research.

”If we back out restaurants [and their price increases], then I ballpark sales at approximately 2% — or a bit below the core rate of inflation,” he said.

”In other words, real sales may have reflected an actual loss over last year. This was despite the longer holiday shopping season,” noting that stores enjoyed a shopping season this year as Thanksgiving fell on November 22 compared to the 30th in 2006.

Online shopping rose again this year but less than in previous holiday seasons.

According to another research firm, comScore, internet sales were up 19% between November 1 and December 21, the lowest in five years.

Counting the last minute-shopping, web purchases rose 20% between November 1 and December 24, barely more than the 21% of the first 10 months of 2007.

Last year, internet sales jumped 25% during the holiday season.

But some major internet retailers were happy with their numbers as Amazon.com boasted its ”strongest-ever” holiday season thanks to electronics such as GPS systems and Nintendo’s Wii videogame console, which sold every 17 seconds on the website.

But US retail giant Target said on Monday its sales would drop in December, while the National Retail Federation expects a 4% rise for November to December — the lowest since 2002.

In this environment, the retail industry saw its share prices lose 10% on Wall Street since later November.

Retailers have offered bargains since November to lure consumers into their stores, a tactic that boosts private discount websites such as Editor’s Closet, which has 10 000 members.

Created this year by three French entrepreneurs with a $35 000 investment, the private site has attracted luxury brands looking to dispose of their unsold merchandise.

”American consumers look for bargains, and we attract all those who don’t have access to private store sales,” said Editor’s Closet chief executive Michael Meyerson, adding that the company hopes to have 500 000 members in one year. – Sapa-AFP