Christmas shopping season was weak for retailers

Whether it was the ongoing concerns about the economy or the weather, this Christmas shopping season didn’t pan out the way many predicted. It’s still possible for retailers to make up some ground between now and the end of the year, there will likely be consequences in 2013, with less inventory and probably more factory job cuts.

Sales of electronics, clothing, jewelry and home goods in the two months before Christmas increased 0.7 percent compared with last year, according to the MasterCard Advisors SpendingPulse report.

That was below the healthy 3 to 4 percent growth that analysts had expected — and it was the worst year-over-year performance since 2008, when spending shrank sharply during the Great Recession. In 2011, retail sales climbed 4 to 5 percent during November and December, according to ShopperTrak.

This year’s shopping season was marred by bad weather and rising uncertainty about the economy in the face of possible tax hikes and spending cuts early next year. Some analysts say the massacre of schoolchildren in Newtown, Conn., earlier this month may also have chipped away at shoppers’ enthusiasm.

Holiday shopping via Shutterstock

Holiday shopping via Shutterstock

An American in Paris, France. BA in History & Political Science from Ohio State. Provided consulting services to US software startups, launching new business overseas that have both IPO’d and sold to well-known global software companies. Currently launching a new cloud-based startup. Full bio here.

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12 Responses to “Christmas shopping season was weak for retailers”

  1. hoary_nodens says:

    Well, maybe that means that a few less square miles of coral reef will be exterminated this holiday season.

    Cheering for increased holiday sales is cheering for the extermination of life on earth.

    7 billion and counting.

  2. Phil says:

    It’s probably not a good thing for the economy in a general sort of way, but I find it hard to grieve over the fact that Americans (and I’ve lived in this country most of my life) are finally getting over their addiction to materialism/consumerism. We don’t need to take out a mortgage to pay for the holidays. We don’t need to make the Walton’s – ie Walmart, any richer than they already are. Junior does not need a brand new car for Christmas, and little Bratnilla doesn’t need the latest designer-label thing from I. Magnin.

    When I was a kid, my parents spent no more than $50 – $75 per kid (in today’s dollars) on gifts and grandparents no more than about $10 per kid – because there were so many of us, and we had lovely holiday celebrations. I can guarantee there were no designer labels on anything either.

    I know I sound like an old fart, but it did seem like Christmases were a lot more enjoyable back in the day, and a lot less of a burden financially and a hell of a lot less stressful. Maybe it’s time we took a step back to those times, despite Wall Street’s lamenting the fact.

  3. Ford Prefect says:

    Look it up. He said many times in 2009 and again throughout 2010. He’s said so many other things along those lines I hardly need to make anything up. He also said in 2010, when the U3 was sitting at 10.5%, that “the economy is on the right track.” He was wrong then and he’s wrong now.

    So there’s that as well.

  4. condew says:

    I don’t recall any Democrat, let alone the President, saying “Government can’t create jobs.”, which casts a doubt on everything you say.

  5. Ford Prefect says:

    Both parties own it. After four years of a Democratic President saying, “Government can’t create jobs,” it’s hardly surprising the economy is doing so badly. Lots of payouts to corporations and banks, but nothing but falling wages and confiscated savings for the rest of us.

    The GOP owns their psychopathy. The Democrats own their mean spiritedness and greed. Either way, the result is the same.

  6. condew says:

    This year’s propaganda about how we absolutely must cut Social Security wouldn’t mix well with propaganda to push buying. The 2% is playing a longer game this year, angling for a future ability to make Americans work until they are seventy and then retire in poverty; in other words lower profits this holiday season to help with the push for higher profits later.

  7. condew says:

    I’ll bet the threat of the sequester in January had an impact on buying in the DC area. The president may say it won’t happen, but the Tea Party members of the Republican party are crazy enough to not let anybody stop it. Republicans own this.

  8. BeccaM says:

    This is fascinating because haven’t we been hearing happy HS stories for last month or more about how year-end holiday sales numbers were up and better than expected?

    First of all, I never give much credence to what unnamed “analysts” might have to suggest as to the reasons why this year turned out to be weak. Superstorm/Hurricane Sandy? Sure, that makes sense — people all up and down the coast have had their lives ruined and they’re more likely to go spending money at Home Depot for repair supplies than a new big-screen TV. But the Newton shooting? Please, get real.

    Decade after decade, we Americans have proven the only time we collectively don’t spend our asses off for year-end purchases is when we either don’t have the money to spend on it or are afraid we’ll soon need that money to pay for rent or food, or will soon be unemployed, and don’t want to go blowing it on junk we don’t really need.

    Naja Pallida lists the real reasons below: Wages continue to be stagnant and are declining. The real estate market continues to be a disaster for current home owners, particularly since the banksters are now ramping up on the short-sales and foreclosures. The real unemployment numbers would have been declared an unacceptable national crisis a generation ago. And we have one party wanting to play the “choco rations are going up” games with the real inflation being experienced by regular people, with this chained-CPI rubbish, while the other refuses to govern at all.

    In a rational, reasonable country, both parties would see a vast pool of disaffected, anxious, financially distressed Americans as an opportunity for electoral victories. We should be seeing competing jobs programs and stimulus, as each party tries to take actions for which it can claim credit in the resulting strong recovery. Instead? We get austerity. We get debt brinksmanship. We get cuts to Social Security, Medicare, veterans and unemployment benefits, education, infrastructure projects, and never is it seriously suggested that maybe tax rates should be made more progressive again. Neither party will admit that maybe a military budget that more than doubled since 2000 is more than we can afford.

    It really is that simple: People can’t spend money they don’t have or can’t borrow, or when we’re afraid we soon won’t have what little we still have. Meanwhile, the plutocratic bastard class only spends money on stuff they consider important and essential. Like buying elections, for instance.

  9. Ford Prefect says:

    Isn’t it funny how economic propaganda (“It’s all better now, so go shopping, dammit!”) tends to fail when people are broke and staring into the abyss of yet another round of recession? I can’t wait to hear the ruling elites blame the Little People for the next downturn, because they didn’t hurl themselves onto the sacrificial alter of debt peonage during the holidays!

  10. Naja pallida says:

    Most of our Christmas gifts this year were upcycled crafty things, or giving things we already had, and simply had no real use for that we figured someone else would appreciate more. The only new thing I actually bought was from an online store, because I couldn’t find it locally at a reasonable price.

    Despite what Washington is mumbling about, recovery for the average person still has not happened. Wages are stagnant, things like Christmas bonuses for most people are non-existent, many other people are still out of work, homes are still being foreclosed on, credit card debt is still at a ridiculously high level. While the prices on ordinary goods has been going up. Just because no elected officials are seriously talking about these things, doesn’t mean they aren’t out there. Until someone does something to give a helping hand to the middle class, and to lift more of those 50 million people in poverty into the middle class, the public’s spending habits will continue to stagnate.

  11. lynchie says:

    Pretty simple really. Most people in the middle class have no extra income to spend. Maybe they have already accumulated all the “stuff” they need for now., We don’t need extra crap and besides there were no real deals except on giant 60′ tv’s. The spending at the holiday season helps the 1% not middle income earners. The jobs created were part time minimum wage jobs with no future and little chance to become anything other than that.

  12. Bukko_Canukko says:

    I was surprised at the lack of hype Hype HYPE about the Christmas shopping season in American media this year. I had wondered whether it was a down year in sales terms, so the media were downplaying that fact. It seems like when it comes to economic news, spin about the “recovery” trumps reporting the real (bad) news, as though telling the truth might spook the sheople. Past years, holiday spending has been pitched as the linchpin of the American economy. I didn’t notice so much fervour about it in 2012, aside from the “Black Friday” madness stories. Perhaps it’s because I pay less attention to U.S. news each successive year I live outside the country. Or perhaps the stories about killing sprees took precedence over ones about shopping sprees.

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