Luxury jewelry appears to have dragged down already slumping luxury sales for the 2008 holiday season, according to data compiled by MasterCard Advisors.
Luxury sales showed the largest year-over-year declines, with sales down by more than 34 percent over last year, according to MasterCard Advisors’ SpendingPulse, a macro-economic report tracking retail and service sales nationally. However, when jewelry is excluded, luxury sales are down slightly over 21 percent compared with 2007.
Overall retail sales for the holiday shopping season (Nov. 1- Dec. 24) were down in the down in the 5.5 to 8 percent range, according to the report. A 40 percent of the drop in the price of gasoline compared to December 2007 accounted for almost half of the decline. Excluding gasoline, total sales were down 2 to 4 percent this holiday season compared to the same period in 2007.
There were a few signs of relative strength, according to Michael McNamara, vice president of Research and Analysis for SpendingPulse. Sectors that sell food, such as grocery and general merchandise stores and some sectors of the restaurant sector helped keep total declines in the single digit range. ECommerce sales remain comparatively healthy.
However, McNamara noted, “A difficult economic environment combined with unfavorable weather during the last week of shopping made 2008 one of the most challenging holiday shopping seasons in decades.”
In addition to luxury, SpendingPulse analyzed the electronics, specialty (apparel), and eCommerce, sectors. Season highlights include:
Overall eCommerce sales declined only 2.3 percent compared to the 2007 holiday season. McNamara pointed to the poor weather in the final two weeks before Christmas as possibly shifting sales volume to the on-line channel, as customers had difficulty traveling to brick and mortar locations.
Total apparel sales declines stabilized in the 19 to 21 percent range over the same period last year, only slightly higher than the 19.5 percent year-to-year decline through the first week in December, and the 19 percent decline in the first half of November. Women’s apparel sales have been fairly consistent, with year-to-year declines of 22 percent to 23 percent for most of the season.
Men’s apparel showed some improvement toward the end of the season, with a total decline of 14.3 percent for the season compared to the same period in 2007, up slightly from the 16.1 percent decline through the midseason and a 19.1 percent drop for the week after Black Friday.
Footwear sales showed relative resilience, declining 13.5 percent compared to the 2007 holiday season.