There’s panic in the retail world as one of the biggest shopping weeks of the year came up empty … forcing stores to go back to the gimmick well and cut prices on already deeply discounted items even further.
According to ShopperTrak – a leading retail research company – in-store retail sales declined by 3.1 percent for the week ending December 22. Meanwhile traffic in these brick-and-mortar retail stores was down 21.2 percent from 2012. That’s terrible news because aside from the day after Thanksgiving (a.k.a. “Black Friday”) – the Friday, Saturday and Sunday before Christmas typically represent the busiest shopping days of the year.
“Bad weather throughout the country kept some shoppers away from stores,” ShopperTrak founder Bill Martin said. “This past week was their final opportunity to complete their holiday shopping before Christmas – and though many did finish making their purchases, retailers did not see as many shoppers as last year.”
However in an interview with Marketwatch Martin acknowledged “we’ve been seeing downward traffic for the whole season.”
In addition to less traffic and fewer purchases, the items being bought by shoppers are often heavily discounted – which eats into profits.
“The discounts are heavier than last year,” Martin said. ”(They are) headwinds for the sales growth.”
The bad news comes on the heels of a ho-hum Black Friday – which saw sales decline by 2.9 percent from 2012 (the first decline since 2009).
“Retailers didn’t get what they wanted from Black Friday and they will need to make it up in the next three weeks,” a Bloomberg retail analyst said three weeks ago.
They didn’t …
The National Retail Federation had projected 3.9 percent growth for the duration of the holiday season, although at this point that figure seems like a pipe dream.
Why do these numbers matter? Consumer spending accounts for roughly 70 percent of America’s gross domestic product – and the holiday season typically accounts for anywhere from 20-40 percent of a retailer’s annual sales.