So far, in general, the holiday season appears to have been better than last year, with substantial gains on the Internet outpacing more modest gains among brick-and-mortar retailers. Other strong categories for the season were luxury goods and online jewelry and watch sales.
A late pre-Christmas surge in spending propelled retail chain store sales to increase by 2.7% for the week ending Dec. 25, according to the International Council of Shopping Centers (ICSC)-UBS Weekly Chain Store Sales Index. On a year-over-year basis, the sales pace rose by 4.3%, which was the strongest gain for the index since July 3, 2004.
MasterCard Advisors, a consulting unit of the credit card giant MasterCard International, estimates holiday spending rose 12.9% over last year. Meanwhile, Visa USA reportedly said that spending by consumers using its credit cards rose 18% compared with 2003.
And ComScore Networks Inc., which tracks online purchases, reportedly said sales by Web retailers jumped 28%, beating its earlier forecast of 23% to 26% growth during the holidays.
“The retail season has not been as bad as people are making it out to be; in fact, it’s markedly better,” Craig Johnson, president of Customer Growth Partners LLC, a New Canaan, Conn., retail consulting firm, told The Washington Post.
The National Retail Federation, an industry trade group, is predicting a 4.5% sales increase for the season. But Visa and MasterCard’s holiday sales tallies reflect online sales and gift card purchases. The retail federation’s estimate counts only some online purchases and no gift card sales.
Analysts reportedly said a longer holiday shopping season contributed to the big sales increases. This year, there were two more days between Thanksgiving and Christmas than in 2003.
Visa said spending by its cardholders on Christmas Eve increased 11.7% over last year, with the biggest night-before-Christmas gains at discounters and department stores. With Christmas falling on a Saturday this year, many companies gave employees Friday off, creating a Christmas Eve shopping opportunity that doesn’t usually exist.
Shoppers waited until the last-minute on the Web, too. Online buying, which traditionally peaks around Dec. 8 and begins to taper off substantially until Christmas, remained robust until the holiday. Web purchasing rose 57% during the week ended Dec. 19, Dan Hess, ComScore senior vice president told The Washington Post.
“It was a very strong end to the season,” he reportedly said, pointing to growth at Walmart.com, Bestbuy.com, and Lowes.com.
Amazon.com yesterday reported a record-breaking season for sales and site traffic, saying at one point it sold 32 items a second.
Amazon’s Jewelry & Watches Store sold more than one watch per minute since Nov. 25, with $949 million in revenue during the first six weeks of the season.
“Amazon has paved the way for other e-tailers,” Neilsen/Netratings senior retail analyst Heather Daugherty told the E-Commerce Times. “They built a business selling books, added music and slowly added new categories. Now they are into pretty much everything, and with its successful technology platform and fulfillment capabilities, it has been able to capitalize in the online retail world.”
Daugherty was also quick to note the appeal of jewelry online. “Jewelry has turned out to be a strong category online with substantial growth in sales this season, increasing 32% year-over-year as a category,” Dougherty said. “As the online buying population matures, there is increased confidence and comfort in purchasing non-commoditized goods online, which has provided retailers with the opportunity to sell a wide variety of product categories and price points.”
Like online buying, gift card sales are on track to beat industry sales projections this year, according to the ICSC.
Michael P. Niemira, the council’s chief economist, reportedly predicts gift cards will account for between 10% and 11% of holiday spending, or more than $20 billion, beating his earlier forecast of 8% to 10%.
Much of the growth, he reportedly said, came in gift cards sold by malls, which be used by any of their retail tenants, and by credit card companies such as American Express and Visa, which can be spent anywhere.
High-end shoppers spent big this year. According to MasterCard Advisors, sales above $1,000 rose 13.5% from last year, while transactions between $500 and $999 jumped 6.6%.
The figures likely reflect the purchase of luxury brands, such as Coach Inc., which experienced strong growth in November and December. The company reportedly said it expects holiday sales to have grown 25%.
Meanwhile, Wal-Mart yesterday estimated that December sales will have grown 1% to 3%, within its estimated range. It had originally predicted a 2% to 4% sales increase and had already lowered its November sales forecast.