June 19, 2018
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Economy weighs on shoppers in final holiday dash to mall

By Cotten Timberlake, Bloomberg News

WASHINGTON — Holiday shoppers descended on malls this weekend in a last-minute dash to buy gifts amid concerns about the nation’s economy and the impasse in Washington over taxes and spending.

Shopping yesterday for clothes and Lego toys for her 2- and 4-year-old children at a mall in Burlington, Mass., Marjorie Decker, 40, said her family is spending less compared with last year.

“It’s an unpredictable economy,” said Decker, who will be sworn in next month as a member of the state legislature. “We’re more mindful of what they do and don’t need.”

Americans have become warier as Washington approaches the end of the year without an agreement to forestall higher taxes and automatic spending cuts — the so-called fiscal cliff. Last month, retailers from Macy’s to Target posted same- store sales that trailed analysts’ estimates.

Consumer confidence fell in December to a five-month low, according to a Dec. 21 report. The Thomson Reuters/University of Michigan consumer sentiment index slid to 72.9, the weakest since July, from 82.7 in November.

In another sign that consumers are pulling back, U.S. online sales increased 8.4 percent this holiday season, compared with last year’s almost 16 percent gain, MasterCard Advisors SpendingPulse said.

Sales grew to $48 billion from Oct. 28 through Dec. 22, the Purchase, N.Y.-based research firm said yesterday. The figures come from the 60,000 Web retailers it tracks.

Besides the fiscal concerns, widespread power outages from Sandy, the hurricane that devastated the East Coast in October, also hurt holiday shopping on the Internet, said Michael McNamara, a vice president at SpendingPulse.

“When you look at the fiscal-cliff media coverage as well as the decline in consumer confidence and the slowdown in e- commerce, all those basically happened at the same time,” McNamara said in a telephone interview.

In a separate report, Comscore said Sunday that e- commerce sales jumped 16 percent to $38.7 billion between Nov. 1 and Dec. 21. The Reston, Va.-based digital research firm reported a 15 percent gain last year. It excludes auctions and large corporate purchases.

Over the weekend, brick-and-mortar retailers may have benefited as promotions, extended hours and dwindling delivery times for late Web sales drew last-minute shoppers to stores.

“Super Saturday,” the industry’s term for the last Saturday before Christmas, may have rivaled the day after Thanksgiving, called Black Friday in the U.S., for the busiest shopping day of the year, McNamara said. Black Friday recorded total sales of $18.9 billion, he said.

An indication of how the weekend and the two-month holiday season fared will come on Dec. 25, when SpendingPulse plans to release its sales figures through Dec. 24. It tracks total U.S. retail sales via all payment forms.

The National Retail Federation has said holiday sales will rise 4.1 percent to about $586.1 billion this year, compared with a 5.6 percent gain in 2011. Sales for November and December account for 20 percent to 40 percent of U.S. retailers’ annual revenue, according to the Washington-based trade group. Last year’s fourth quarter generated 59 percent of Cincinnati-based Macy’s 2011 profit.

ShopperTrak, a Chicago-based researcher of store traffic, on Dec. 19 trimmed its forecast for November-December holiday sales to a gain of 2.5 percent from a prior estimate of 3.3 percent. The store closings after Hurricane Sandy and heavy discounting were crimping sales volumes, it said.

Sales at retailers’ stores open at least a year may climb 3 percent in November and December, slower than the 3.3 percent gain last year, the International Council of Shopping Centers reiterated on Dec. 18, in a forecast for the more than 25 chains it tracks. The ICSC is predicting retailers will report a 4 percent to 4.5 percent comparable sales increase for December when they issue their latest monthly reports on Jan. 3.

Stores at the Twelve Oaks Mall in Novi, Mich., were seeing small sales increases overall as larger transactions were compensating for a drop in store visitors, Karen MacDonald, a spokeswoman for the mall’s operator Taubman Centers Inc., said in an email Sunday. At the Stamford Town Center in Connecticut, stores were reporting that sales were “flat to up single digits” in percentage terms for the week, she said.

The last weekend of shopping wasn’t all doom and gloom.

Feeling “more optimistic” was Wayne Young, a real estate agent in Greensboro, North Carolina, who said Dec. 22 he was planning to spend as much as $1,500 on gifts, three times as much as last year, after he benefited from the housing rebound and closed on the sale of four houses in the past month.

Janessa Mendes, 22, a sales associate from Bronx, New York, who was shopping at the Bronx Terminal Market shopping center, said she was digging deeper into her wallet this year because family members wanted consumer electronics, and her purchases included an Apple Inc. iPod and an iPhone cover.

“Everybody wants more expensive gifts,” she said.

— With assistance from Lorraine Woellert in Washington, Renee Dudley and Lauren Coleman-Lochner in New York and Chris Burritt in Greensboro, N.C.

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