Holiday sales grow at weakest pace since 2008
People gather in front of Christmas light decorations in midtown Manhattan in New York City.
Holiday retail sales grew at their weakest pace since 2008, according to a new report. Analysts are blaming several factors including the threat of the fiscal cliff in Washington, the shooting in Newtown, the presidential election, and the weather for anemic sales this year.
A MasterCard Advisors Spending Pulse report found that sales dropped nearly 4 percent in the mid-Atlantic – ground zero for Super Storm Sandy last month. Across the whole Northeast, sales fell 1.4 percent. According to MasterCard, those two regions combined account for nearly a quarter of all retail sales in the country.
Analysts were expecting 3-4 percent growth, but sales increased less than 1 percent the past two months. The holidays are a critical season for the economy, as the last two months of the year represent 40 percent of annual sales for retailers. If sales continue to be weak, wholesalers and factories could soon feel the effect of the slowdown as well.
Not all market watchers are dismayed by the numbers. "The retail season was still up and has been trending up for the last three years," said Juli Niemann, an analyst with Smith, Moore & Company. "It just wasn't as robust as they wanted."
With one week left in the year, retailers still have time to make some gains. MasterCard analysts point out that the final week of December usually accounts for about 15 percent of December sales.
And if not December, there is always January. Niemann says she expects retailers will push out items at the end of January, in order to clear their shelves for spring inventory.