Skip to comments.Discounts push holiday sales up
Posted on 12/27/2013 3:51:32 AM PST by SoFloFreeper
U.S. retail sales rose 3.5 percent during the holiday season this year, helped by deep discounts at malls and purchases of childrens apparel and jewelry, MasterCard Advisors SpendingPulse said.
Sales of holiday-related categories, such as clothing, electronics and luxury goods, rose 2.3 percent from Nov. 1 through Dec. 24 compared with a year earlier, the research firm said Thursday. SpendingPulse tracks total U.S. sales at stores and online via all payment forms.
Falling store traffic in recent weeks and uneven demand, especially for apparel, spurred chains to risk earnings by pouring on the discounts to generate sales. Retailers including Gap were offering as much as 75 percent off and some, including Macys and Kohls, were keeping stores open around the clock starting Dec. 20.
You are seeing, Its OK for me to go out and spend, Sarah Quinlan, a senior vice president at MasterCard Advisors, said in a phone interview Thursday. That being said, they are still being cautious, and they are picking their retailers. It is not hot 2006-2007 spending we are seeing.
Sales were strongest in jewelry and childrens apparel, while sales of electronics and luxury items excluding jewelry were about the same as the same period last year, SpendingPulse said. Sales of womens and mens apparel fell from last year, the researcher said.
The SpendingPulse data largely tracked researchers expectations for the holiday season. The National Retail Federation reiterated on Dec. 12 its prediction that total sales will rise 3.9 percent in November and December, more than the 3.5 percent gain a year ago. Chicago-based researcher ShopperTrak has said holiday purchases will rise 2.4 percent, the smallest gain since 2009.
The International Council of Shopping Centers said Dec. 24 that sales at retailers stores open at least a year climbed 2.7 percent in the week ending Dec. 21 from a year earlier. The New York trade group maintained its projection that retailers will report comparable-store sales increases of 3 percent to 4 percent for December when they issue their latest monthly reports.
At least this headline tells the truth somewhat--any increase in sales is more due to panicked retailers undercutting their own profit goals in an effort to shrink inventory.
Retail sales were disastrous. Stores are dumping inventory before people start getting those unaffordable obamacare bills and others go bankrupt because they registered and paid, but were never actually covered because the government website doesn’t work.
Otoh, I’m seeing some amazing discounts on furs and other luxury goodies I would never pay full price for. I feel like “Looter” guy....
Exactly, Let’s find some segment where the sales are up, but is that in merchandise count or in dollar value? I would wager they had to keep running the numbers to find that Jewelry and kids clothing, bought at rock bottom profit in dollars and not in margin is supposed to save the day?
The media will never report the real numbers that are going to be that this season was a profit margin loser. I drive by several “Big Box” stores daily and the parking lots have been no better than a regular days capacity which is very low.
My wife went to Wal-Mart on Christmas Eve and no problem parking where she normally would, and that was the same for the entire season. She went to a mall yesterday and again, the same thing. I told her that nobody got any crap they had to take back.
I do remember when one had to play musical parking spaces and even getting close to a mall was an achievement.
“Otoh, Im seeing some amazing discounts on furs and other luxury goodies I would never pay full price for. I feel like Looter guy...”
Those items are becoming a thing of the past in the US (except for the 1%); we are already seeing sales of just about everything increase overseas as Asia develops a middle class while we lose ours.
I agree; my wife and I were in a mall in northern NJ this past Saturday (for an Apple emergency - no way we would have been there otherwise), and I was pleasantly surprised that the lot really wasn’t any different than other Saturdays (this mall gets a lot of NYC shoppers).
I think another thing that must transform Christmas shopping is gift cards; these are increasingly being given to children as well as adults (because it is so hard to keep track of which books/games/clothing children have or want), and they would all be used afterwards.
A friend asked if I thought less people were decorating their homes for Christmas; I agreed, and pointed out that the increased number of Asians (from the subcontinent) probably played a role in that. Not only are these people not Christian, but they are frugal as well.
My wife and I went to wal-mart on early Christmas eve and one thing we noticed was that the store was fully stocked. And that includes the Christmas decoration section.
NPR said sales were up from last year. ;-)
With these discounts, one can only guess at how low the margins have been. I doubt the retailers are even covering their direct cost of most discounted items. Net margins are probably approaching negative double digits.
Ofcourse, what would the MSM know about how a business is run, they support Obamacare.
I completely agree. When we hit Feb-Mar this year there will be a huge number of people screaming “what happened to all my money”. The huge sucking sound won’t be just jobs leaving our country, it will be all the disposable income being stolen by obamacare.
That is strange; I should probably buy another artificial tree (mine is 15+ years old, and looking every bit of them). Our Wal-Mart is packed all the time (you have to go early, to miss the gibsmedats), but many of those shopping are buying staples - cheap food and clothing (and other stores are feeling the loss of those customers). We’ve lost a Foodtown and a Pathmark, as well as many small businesses, just as many other areas have.
They must be including gift cards as “sales”, though they are actually very different. They are future sales, and the store issuing the card basically carries a liability on its books until the cards are used/merchandise is bought. For the items you describe (Christmas decorations), I don’t see many people buying them in the weeks after Christmas.
Local jewelry stores are having sales of, “up to 70% off”, of course they do that every year.
They must have a huge profit margin to begin with, to discount items that much. I can assure you they aren’t operating at a loss, even with 70% discounts.
I've noticed that where I live too.
Yeah push dales of units up but kills the bottom line - profit. Just the way Marxists and socialists like it.
Yeah push the number of units sold up but kills the bottom line - profit. Just the way Marxists and socialists like it.
For the sake of the mid-term elections, I hope you’re right in regards to the costs of ObamaCare (though I’d imagine additional steps will be taken to delay the punch).
Even without ObamaCare, things have been bad for so long people are becoming accustomed to it. Young people today have never known gasoline at $1 per gallon, or the idea of actually saving money (I work with some that are constantly monitoring their bank accounts to prevent overdrafts). Heck, even jobs are unknown to many of them. Young people I do see working today are usually in low-paying jobs (which are better than none) that probably don’t pay for much more than a phone bill and car insurance (rents/mortgages are out of the questions).
What state/region? I’m in northern NJ, where we are inundated with “replacement Americans”.
Christmas decorations are not an annual expense; they last for years, so I don’t think this is an economic thing (unless the homes are foreclosed/empty). I think it is demographic.
My wife bought several Lenox china pieces yesterday for presents next year. She had $100 worth of points she used and came home with a receipt that showed the regular price of everything to be about $575. The bottom line on the receipt was $54.
In addition to supporting me totally in my hobby turned business which is tied directly to pro and semi pro racing, she loves football too!
I’ve doing seasonal work at a local national Department Store.At the last moment, they extended the hours of a big sale event last week because it’s the only big movement of merchandise they’ve had all season.
Yesterday (the 26th), the management came around to employees and asked if they wanted to go home an hour or two early because “we have to cut back hours”.
Yeah, sounds like things are really great/
i wonder what %% of Xmas decorations sold in Wally World/Target/etc. what a waste of time stocking all of those shelves in Sept./Oct. It probably just sat there for three months collecting dust. Most consumers can’t afford to waste money on it anymore(just reuse the decorations from the last 10 years) and this weekend, thousands of wally world employees have to put it all back!
In what is left of our immediate and extended families, the gift exchanges are basically over, sending cards is about a 50% proposition, and the desire to decorate is nonexistent. It's as if sometime in the 90's we all took our foot off the gas and whatever momentum we still had came to a screeching-azz halt with the advent of Obama. It's only fractionally economic, more of a Carteresque malaise on steroids; if there is a demographic that consists of people who decided that the trappings of the Christmas season were no longer worth it, we'd qualify.
Retailers including Gap were offering as much as 75 percent off
Not just the GAP , my wife bought all her gifts at the mall this year ,,, all the big name clothing retailers were in the 75% off range and several of the independent shops were even cheaper .. you don’t blow out inventory at or below cost in the Christmas season (and selling at half the Walmart price in a high rent mall is just that) unless you’re planning on closing shop in the new year... and despite the discounts parking was absolutely no problem ,, never more than half the spots filled.. in other years a fight over available spots would have been the norm.. even in recent (post 2008) years...
So what is the definition of "retail sales." Gross dollars? If so, then if the above is true, profits are down by a significant amount.
sell at a loss and make it up on volume right? ;)
We've been holding on by our fingernails for five years, when I was first laid off. Two lay-offs in five years. Discretionary spending ended for us five years ago. No Christmas presents for anyone this year, except for our kids. I suspect we're not alone.
Thank You Obama Voters
There is (or was when I was in the business) at least a 3x markup on commercial jewelry (gold/set stones). At trade shows, it was always possible to buy single pieces for oneself(not at wholesale in volume)at 1/3 the *retail value*.
I learned to “hand weigh” finished gold pieces (chains/bracelets). Those made in China weighed considerably less than similar pieces made in Italy, for example. The Chinese can stretch a small amount of gold incredibly far.
Back then, our line was primarily Sterling, Titanium and Niobium. Gold/stones was usually custom work and our profit came from the labor, design and the stones. People we still know in the custom craft end of the business don’t even exhibit their gold show pieces in public, due to theft. We know someone who lost $85k worth of gold(metal value only) a few years back at a prestigious juried street show.
I didn't know much about the jewelry business until an acquaintance entered the trade. I didn't know that jewelry was difficult, if not impossible, for businesses to insure.
My friend was travelling with $100k of jewelry in a briefcase. While he was boarding a plane, he put his briefcase down momentarily, to fold his coat. When he reached down for his briefcase, it was gone. But he noticed a man hurriedly leaving the plane.
My friend chased him through the entire airport until the thief finally dropped the case.
Absolutely love it. I am stealing it.
Not mentioned anywhere is the impact of returns on net sales.
That won’t be know until mid February, I would imagine and most of us will never really know what the last answer is.
I agree with a lot of observations: this season has been slow with the possible exception of the 23rd: I was out in the rain and mess around here and it was an absolute ZOO. And people were actually buying, but it appeared to be small stuff: couple items, few bags. But you never know: gift cards do not take up a lot of room.
But even yesterday, I did not see anything approaching an overwhelming crowd crush.
I think the most of it is breathless msm hype, trying to save their BOY’s and the dumblecrat’s bacon.
I have noticed that the emails from the online merchants I patronize have become increasingly shrill. Every sale is *extended* &/or carried further discounts, lower limits for free shipping, increased coupons for future purchases. One merchant sends out hourly emails.
A friend in upstate NY reported that sales at their yearly high-end juried craft show was down 86% from previous years. A craftsperson who specializes in hand-painted vintage furniture reported that store sales were dismal. This is a second income for her and she relies on it. Not this year.
For the first time this year, clients gave us grocery store gift certificates at Christmas. They were much appreciated.
It’s not like I did a survey but just a general observation.
Back in the late 90’s my husband and two other men chased a young thug 2 blocks to retrieve the cases belonging two older women. They chased him to a major road and he dropped the cases in order to get across faster. These were enameled gold and the metal value was small. All the profit came from the skilled enameling. We heard horror stories from exhibitors at large national trade shows and they had the line of bullet holes in their van as proof. Many jewelers hired armed security in order to do these shows.
Many of the premier wholesale shows are not only by invitation only, some require password access to encrypted sites in order to learn the venue.
We exited in 1998. It just wasn’t worth it anymore.
Just curious, do you recommend buying puts on major retailers before Q4 earnings are announced?
My gloom-and-doom coworker has long been predicting that the media is just going to declare the recession over and that happy days are here again. And that the sheeple will stupidly nod in agreement and give Obama the credit.
Seems like they are gonna make an attempt at that anyhow.
Hah you just described us. Quite a few years ago I made a rule....no more adult gift buying. Hubby and I don’t even buy for each other anymore.
Instead I do a huge feed on Christmas Eve for friends and family then a quiet Christmas dinner. All our money at Christmas now goes on food and drink. Has made life a lot simpler.
> sell at a loss and make it up on volume right? ;)
Yeah kind of like how our current administration calculates their numbers - Obamanomics. Cook the books until someone catches you then blame ut on someone else, preferably white.
Booming 0bama economy. Furloughed government workers returning to work and seasonal retail hiring shot the new jobs created to a great depression levels. The administration is touting a recovery. I wish I was stupid so I could feel that things are great.
Good observations all. You can’t lose a little bit on every deal and make it up in volume. Only the federal government can operate that way and this federal government has doubled down. This is only the beginning of the fall. Terminal velocity will be reached in late 2014. The ground is rushing up to meet us.
gibsmedats - Absolutely love it. I am stealing it.
Can;t take credit for it; saw it on FR and couldn’t resist using it.
“I think the most of it is breathless msm hype, trying to save their BOYs and the dumblecrats bacon.”
I completely agree.
“Its not like I did a survey but just a general observation.”
Same here; it was enough to notice it...
“In what is left of our immediate and extended families, the gift exchanges are basically over, sending cards is about a 50% proposition, and the desire to decorate is nonexistent. It’s as if sometime in the 90’s we all took our foot off the gas and whatever momentum we still had came to a screeching-azz halt with the advent of Obama. It’s only fractionally economic, more of a Carteresque malaise on steroids; if there is a demographic that consists of people who decided that the trappings of the Christmas season were no longer worth it, we’d qualify.”
I hope the spirit is still there; I don’t mind watching the economic buzz slow down. It is a time for family and faith, and has been distorted into a bizarre spending binge. I think the decorations centered around the Nativity are nice; the secular “winterfest” stuff is just weird...
This year, it was very subdued. Many homes that used to go all-out only threw up a few light strands, if that. Speaking for myself, I haven't rigged up outdoor lights for several years now. Just haven't gotten into it like I used to but we still go a little crazy indoors.
Ditto for Christmas shopping. I went to almost all gift cards a few years back because I got sick of relatives (especially the younger ones) asking for receipts so they could take their gifts back and get something else. When I was a kid, I would never think to ask an aunt or uncle to take a Christmas gift back for me. It just seems so crass and ungrateful.
I agree; “subdued” is a good word for it.
I’m not a fan of gift cards (too much like giving cash outright), but they do ensure that the recipient will get something they will really like/use. With kids it is impossible to track what books or games they have (unless you are very involved with them - I don’t mean your own children, but other people’s children).
I couldn’t imagine returning gifts like that, either; I don’t know what the answer is.