According to MasterCard Advisors SpendingPulse,which tracks all payment types including credit cards, cash and checks across apparel, electronics, luxurygoods, online and furnishings, holiday-related sales rose a mere 0.7% from Oct. 28 to Dec. 24. That’s well below the 2% increase during holiday 2011 season.
The SpendingPulse results released this week coincide with lowered holiday sales expectations from ShopperTrak, a research firm, that reported last week that it lowered its holiday sales forecast from a 3.3% increase to a 2.5% increase. The International Council of Shopping Centers and Goldman Sachs Weekly Chain Store Sales Index said sales rose only 0.7% in the week ended Saturday, Dec. 22.
If the preliminary results prove true, holiday 2012 sales which had been predicted to hit a 3% to 4% growth could be the worst year-over-year performance since 2008 when spending fell during the Great Recession. In 2011, retail sales climbed 4% to 5% during November and December, according to ShopperTrak.
Retail analysts pointed to a series of factors that may have dampened holiday sales. Such as Hurricane Sandy’s effects and the gridlock in Congress over the so-called fiscal cliff which would result in higher taxes and spending cuts.
“Who wants credit card debt in January when there will be 2 percent less in the check plus a year of higher tax rates on stale incomes,” Brian Sozzi, chief equities analyst at NBG Productions, wrote in a note to clients.
There’s still hope, however. According to SpendingPulse, the final week of December can account for 15% of holiday sales.