The early returns are in and it looks like holiday sales were slightly better than expected. After spending the entire holding out for bargains, shoppers finally caved. In the end, neither snow nor sleet -- nor massive snowstorms, for that matter -- could keep consumers from their appointed rounds at the mall.%%DynaPub-Enhancement class="enhancement contentType-HTML Content fragmentId-1 payloadId-61603 alignment-right size-small"%% Holiday sales grew 3.6% over 2008, according to the SpendingPulse tally by MasterCard Advisors. That's not a masterstroke, considering the debacle that was last year's holiday. But it's ahead of most forecasts, which had called for everything from a 2% drop to a 2% gain.
Stores Were Packed
But MasterCard's analysts were careful to point out this holiday season was a day longer than last year. Factoring out that day, sales were closer to 1% ahead -- though they found it hard to explain how one extra sales day would account for such a bump.
Most media reports found stores packed, especially in the wake of the snowstorms that paralyzed most of the East Coast the weekend before Christmas. But shoppers remained cautious as they had throughout the season. Retailers had been following the weather closely, in fear the storm would ruin the last weekend of holiday sales and dent the last-minute rush they were counting on to put them over the top.
Consumers are shopping later every year and retailers had taken note of that habit. They put more offers off until the weeks after Black Friday. They also saved some of their promotions for the days leading to the Christmas holiday and after to take advantage of shoppers who received gift cards for the holidays.
Nor'Easter? So What!
According to the International Council of Shopping Centers, the Nor'Easter only managed to slow things down somewhat; sales were still 0.4% above last year on the week before Christmas, in spite of the storm. It will be interesting to see if the ICSC reports a spike of make-up shopping for the week of Christmas proper -- and the increasingly important weekend after Christmas -- when it releases its weekly figures Tuesday.
So, the general consensus is that this will be a profitable holiday for retailers, but no blowout. Given that unemployment remains in the double digits, no one was expecting fireworks, however. Retailers had kept inventories light and that raised the fear of shortages should consumers' mindset turn.
The Wall Street Journal reported many retailers had ordered new, cheaper apparel that they could restock right after the holiday and still be able to mark down for post-holiday sales if the shopping surge doesn't materialize. The Journal also mentioned that stores such as J.C. Penney (JCP) are stocking up on spring juniors clothes to take advantage of gift-card shopping.
A Stronger 2010
But investors are ready to hear some good news from the retail sector, for a change. Reuters noted that the S&P retail index rose as trading opened the morning after the holiday weekend. And the National Retail Federation recently reported that the volume of retailers' imports coming into U.S. ports is going to break its 2-1/2 year slump in February.
The NRF's Port Tracker Survey is projecting three months of imports increasing on a year-over year basis starting with February. So inventories are heading up, a sign that retailers see a stronger 2010 ahead.
Holiday Sales Could Mark a Turnaround in Retail's Fortunes