Data issued in preliminary survey results by the National Retail Federation in a New York Times report found that retail sales in stores and online from Thanksgiving through the end of this past weekend were down 11 percent annually compared to the same time a year ago, from $57.4 billion to $50.9 billion.
Though it is much too early to make a definitive statement on the success of the holiday shopping season, the results run counter to NRF projections suggesting a banner year.
Other notable data points cited by the NRF included:
-the average holiday weekend shopper spent $159.55 online, which is a 10.2 percent annual decline;
-133.7 million people shopped or planned to shop at stores or online over the Thanksgiving weekend, which is down 5.2 percent; and
-shoppers spent an average of $380.95 over the four days, down 6.4 percent from last year’s average of $407.02
In early October, the NRF said that it expected holiday retail sales, which it defines as the months of November and December and exclude autos, gas, and restaurant sales, are expected to grow 4.1 percent compared to 2013 to $616.9 billion, which is above the actual 3.1 percent for 2013.
The NRF said that holiday sales have grown by an average of 2.9 percent over the last ten years, which includes its 2014 projection, and are pegged to account for 19.2 percent of the retail sector’s $3.2 trillion in 2014 annual sales, and if the 4.1 percent 2014 annual increase is reached, it would mark the first time holiday sales have headed up more than 4 percent annually since 2011.
The NRF’s holiday sales forecast, according to the organization, is based on an economic model that uses several different types of indicators, including consumer credit, disposable personal income, and previous monthly sales releases.
The organization’s rationale for the expected annual boost in holiday retail sales was based on the theory that consumers are in a better place at this time of the year than they were a year ago, even though consumer income and spending have only seen moderate gains leading up to the big holiday shopping push. At the same time, though, the NRF also cautioned that shoppers would still be deliberate with purchases and also keep an eye out for attractive bargains.
So, where does that leave things now, based on the less-than-expected results over Thanksgiving weekend?
NRF President and Chief Executive Matt Shay said in the NYT report that the impact of the recession is not over yet for many consumers, coupled with the fact that things like low gas prices and improving job prospects did not translate into “must do” Black Friday and holiday weekend shopping to the levels that were expected.
While the NRF’s data did not see the expected annual gains, data from comScore, specifically related to e-commerce activity, painted a much more positive picture.
According to comScore, U.S. desktop retail e-commerce spending for the first 28 days of the November-December holiday shopping season was up 15 percent annually at $22.7 billion, with Thanksgiving alone up 32 percent at $1.01 billion, marking the first day of the 2014 holiday shopping season to top the $1 billion mark, followed by Black Friday’s 26 percent annual gain at $1.51 billion.
With today’s calendar showing it is December 1, we are sure to see a lot of activity and information related to holiday shopping, whether it is via foot traffic at malls or desktops. Either way, there is a lot of ground to be covered before a real verdict is rendered as to how things went.
From a supply chain perspective, the NRF’s data could eventually lead to what could be viewed as a “mad scramble” in the form of excess inventory that needs to be moved if holiday sales are lower than expected. An inventory overhang is never a welcome occurrence for retail shippers, and if anyone needs reminding of those (not so) “good times,” then look no further back than the 2008-2009 holiday season, which led to more than a few post-holiday bargains.
But it is way to early to take such a somber tone, so we will have to wait to see how things truly shake out. Either way, it will be fun to follow.