Monday, January 10, 2011

Holiday Spending Was Up

The Christmas holiday shopping reports through December 25 were up for the season as compared to last year.

The Spending Data
Here is what Christmas spending looked like:

Gallup pointed out that upper income spenders drove sales:


The Wall Street Journal reports:
American shoppers expanded their year-end purchases this holiday season by the biggest margin since the boom year of 2005 … U.S. retail sales, excluding automobiles, rose 5.5% between Nov. 5 and Dec. 24 compared with a year ago, according to MasterCard SpendingPulse, a unit of MasterCard Advisors that tracks sales by all types of payment.
Last year, sales rose 4.1% during the 50 day period, but those results were easy comparisons against the recession in 2008, when sales fell 6.1%. …

During the holiday season, clothing posted the strongest gain, up 11.2% over the same period last year when apparel sales were roughly flat. Electronics sales rose only 1.2% this year, as a glut of televisions drove prices down and shoppers shied away from innovations such as 3D TVs. After several years of lackluster sales,  jewelry was a standout category notching an 8.4% sales gain.
Consumer Confidence

Another important data point was released yesterday, and that was consumer (un)confidence. The Conference Board’s report fell to 52.5, below the consensus of 57.4:

This suggests that middle America doesn’t believe things are getting much better.
After all the gushing about how wonderful the sales reports were, the Journal article noted that spending is still tepid, gasoline prices are rising, there are still too many stores, competition is keen with aggressive new foreign retailers coming in, cotton prices are rising, and web sales are threatening brick-and-mortar stores. But there is an even greater barrier to consumption spending.

Information Provided by Donna Antonucci
Prudential Castle Point Realty

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