Retail Disaster: Holiday Sales Crater by 11%, Online Spend Declines

Zero Hedge ^ | 11/30/2014 | Tyler Durden

[SeekAndFind]

Last year was bad. This year is an outright disaster.

As we reported earlier using ShopperTrak data, the first two days of the holiday shopping season were already showing a -0.5% decline across bricks-and-mortar stores, following a "cash for clunkers"-like jump in early promotions which pulled demand forward with little follow through in the remaining shopping days. However, not even we predicted the shocker just released from the National Retail Federation, the traditionally cheery industry organization, which just reported absolutely abysmal numbers: sales during the four-day Thanksgiving holiday period crashed by a whopping 11% from $57.4 billion to $50.9 billion, confirming what everyone but the Fed knows by now: the US middle class is being obliterated, and that key driver of 70% of US economic growth is in the worst shape it has been since the Lehman collapse, courtesy of 6 years of Fed's ruinous central planning. 

Demonstrating the sad state of America's "economic dynamo", shoppers spent an average only $380.95, down 6.4% from $407.02 a year earlier. In fact, as the NRF charts below demonstrate, there was a decline across virtually every tracked spending category (source):

As the WSJ reports, NRF's CEO Matt Shay attributed the drop to a combination of factors, including the fact that retailers moved promotions earlier this year in attempt to get people out sooner and avoid what happened last year when people didn’t finish their shopping because of bad weather.

Also did we mention the NRF is perpetually cheery and always desperate to put a metric ton of lipstick on a pig? Well, hold on to your hats folks:

He also attributed the declines to better online offerings and an improving economy where “people don’t feel the same psychological need to rush out and get the great deal that weekend, particularly if they expected to be more deals,” he said.

And of course the sprint vs marathon comparisons, such as this one: "The holiday season and the weekend are a marathon not a sprint,” NRF Chief Executive Officer Matthew Shay said on a conference call. Odd how that metaphor is never used when the (seasonally-adjusted) sprint beats the marathoners.

So there you have it: a 11% collapse in retail spending has just been spun as super bullish for the US economy, whereby US consumers aren't spending because the economy is simply too strong, and the only reason they don't spend is because they will spend much more later. Or something.

Apparently the plunge in Americans who even care about bargains is also an indication of an economic resurgence:

The retail trade group said the number of people who went shopping over the four-day weekend declined by 5.2% to 134 million, from 141 million last year.

Finally, what we said earlier about a surge in online sales, well forget it - it was a lie based on the now traditional skewed perspectives from a few self-servcing industry organizations:

Despite many retailers offering the same discounts on the Web as they offered in stores, the Internet didn’t attract more shoppers or more spending than last year. Online sales accounted for 42% of sales racked up over the four-day period, the same percentage as last year, though up from 26% in 2006, the trade group said.

In fact, it was worse: "Shoppers spent an average $159.55 online, down 10.2% from $177.67 last year."

But the propaganda piece de resistance is without doubt the following:

“A highly competitive environment, early promotions and the ability to shop 24/7 online all contributed to the shift witnessed this weekend,” Mr. Shay said.

So to summarize: holiday sales plunged, and Americans refused to shop because the economy is "stronger than ever" and because Americans have the option of shopping whenever, which is why they didn't shop in the first place. That, and of course plunging gasoline prices leading to... plunging retail sales, just as all the economists "correctly" predicted.

Goebbels approves.

[kearnyirish2]

That’s right; with so much being spent on essentials, there is little left over.

This won’t improve any time soon, either; the dynamics behind it (outsourcing of jobs and importing of cheaper labor for both blue- and white-collar jobs) aren’t letting up.

[Jane Long]

Sounds like the best kind of Christmas....blessings to you, your hubby...and your 9 children :-)

[newnhdad]

Customers are smarter. They know that the stuff they want will be marked down more and more until the beginning of the year. I usually shop in January and spend considerably less for children’s clothes and shoes. Retailers would be wise to rethink their pricing strategies as online shopping becomes the choice of more people.

[Excellence]

I’m wondering if the threat of protesters made people think twice about going out.

[jimmyo57]

“And if they don’t, they can just go to Ferguson and loot a store.”

No, Ferguson is boycotting capitalism that’s why sales are down 11%! lol

[A message]

A lot of us do not have the money. I’m running about as thin at this point this year that I’ve been in a long time. I haven’t donated yet to the FReepathon and when I do tonight I’ll only be able to donate half of what I’ve done in prior FReepathons.

My message to liberals. Your messiah and his Democrat hack allies have F’d things up royally, the economy is in a shambles, people do not have money and and a stock market inflated on money printed out of thin air is NOT prosperity.

[faithhopecharity]

we have a shopping center (had a grocer and a drug store and a couple dozen little shops)..... that the owner has remodeled ... he then raised the rent 600%. (!)
most of the stores now are small restaurants ... not selling any goods or services, just chow houses.

people are willing to buy lunch. there’s almost no merchandise selling, however. Some of that is on sale online, of course, but still its discouraging to see so many small merchants and service providers (shoe repair guy, vet, dentist, laundry... come to mind) go down in the bad economy.

[TomGuy]

See. Obama’s economy is a roaring success. People have so much they don’t even want to buy more.

[/s]

[blam]

Retail Disaster: Holiday Sales Crater by 11%, Online Spend Declines: NRF Blames Shopping Fiasco On "Stronger Economy"

[EBH]

Actually, what I noticed is the quality of the product is down significantly.

I am not spending even $10 on a jersey shirt that is as thin as what is already in the rag bag at home.

[Diana in Wisconsin]

Glad to see it. People need to be paying down their debt and preparing for the looming economic collapse, versus buying the latest piece of electronics to come down the pike.

And I’m in Retail! It’s going to be a Skinny Christmas in THIS household, I tell you what.

Something you NEED, something to READ and something to EAT.

And a lump of coal in your stocking that will immediately be put to good use in the furnace! :)

[apoliticalone]

If Americans were smart they’d do kind things for others at Christmas instead of buying worthless Chinese trash from big box stores that can’t keep your private info private. Save your money and retire early.

[kearnyirish2]

Yes, as people cut back their spending I’ve waited much less for the dentist. We still have a local shoe repair guy; he described how the falling price of shoes (over decades) has hurt business (with people just replacing shoes instead of repairing them). I use him for tailoring work with leather and thicker materials like canvas (regular tailors are afraid the needles aren’t strong enough).

[grobdriver]

the US middle class is being obliterated

Eh.
We've just got everything we want.

[jocon307]

“We had an Orange Julius and left.”

Those are delicious and I haven’t had one in years and years. Where was this mall? I want to go there now!

For the record I am planning to power out my shopping next weekend! Never shop during this weekend.

[LostInBayport]

What is driving down Christmas sales this year is the increasing amount your paycheck going to pay for higher taxes and especially the Obamacare mandates.

THIS. Many of us now have a much heavier, grimmer burden thanks to Obamacare/Romneycare because we are subsidizing others who pay little to nothing for their insurance. One is very cautious about spending money on frivolities when a) the money is tight because the health insurance premiums have skyrocketed and b) one illness will burn through the inflated deductible and lead to a mountain of bills.

Merry Christmas from the democrat party (not that the other party has made many noises about doing something about repealing the nightmare).

[4yearlurker]

Nothing wrong with a "small Christmas." A few family get togethers,dinners,and a few small gifts is good enough for me. That puts a smile on my face. I got my daughters,and granddaughter a few things. Something for my wife and that's good enough. I told my kids I have enough and don't need anything else. The TV Christmas commercials are downright embarrassing.

[Lorianne]

I went to the hardware store and bought a new toilet handle and a pair of bargain bin gardening gloves.

Does that count?

[4yearlurker]

I buy sweatshirts and jerseys (made in the USA in the 1980s) from the Saint Vincent DePaul store for 50 cents each. Not everything is good and clean but you can find good stuff.

[Lorianne]

It’s getting harder and harder to find leather shoes ... even at higher price points. Forget leather soles.