A report recently released by MasterCard’s SpendingPulse showed that increases in retail sales for the holiday season were the lowest they have been since 2008 and were less than half of the numbers seen last year. Bloomberg News reported that from October 28 through December 24 of this year, a meager 0.7 percent increase was seen in sales both in stores and online, compared with last year’s increase of 2 percent during the same time span. Speculation as to why the numbers were so low, especially for retailers who sell electronics, jewelry (both individual and wholesale), and furniture, point to everything from super storm Sandy to the retailers themselves.
Is Sandy to Blame?
The Bloomberg report claims that much lower than average spending in the northeast region, especially New York, is the result of the devastation caused by Hurricane Sandy. The article also claims that unsavory weather conditions in the Mid-Atlantic and Midwest also caused a hit to holiday sales. Sales generated in the Mid-Atlantic and Northeast states reportedly account for nearly a fourth of national consumer spending, according to Bloomberg. These regions saw a decrease in spending ranging from 1.4 to 3.9 percent. The numbers point to the bad weather conditions as a source for the decline when compared with numbers in the West and South regions where sales increase between 2 and 4 percent over the holiday period.
Another testament to Sandy’s impact on sales is the fact that increases in the northeastern states were mainly in the area of home-related merchandise, which makes sense given the level of destruction and loss from the storm.
Did Retailers do This to Themselves?
Perhaps Mother Nature is not the only one to point the blame at; Money Morning suggests that retailers themselves are skewing the numbers by extending the Christmas shopping season beyond its normal parameters. The article suggests that each year Christmas shopping is starting earlier and earlier even though they traditionally only measure a two-month period when analyzing sales. This results in the illusion of slumped sales when really it could be that people began shopping earlier than in years past.
It seems that certain areas of retail such as wholesale jewelry sellers may be able to bounce back around Valentine’s Day, but others will need to rely on other avenues to make up lost revenue. No matter the cause, the fact remains that people are still not spending the way they used to and are more apt to search for amazing deals rather than paying full price for items, which will continue to impact sales across retail offerings.
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Ashely Wilson is a part of a team of writers who have contributed to tons of blogs about shopping and jewelry. Follow her <a href=”https://twitter.com/AshelyMarie1985″>@AshelyMarie1985</a> to see what else she has to say!