U.S. retail sales rose 2.7 percent this holiday season, the smallest increase since 2009, as stores’ profit-eating discounts failed to draw shoppers to malls, researcher ShopperTrak said.
Customer traffic in November and December declined 15 percent from the same period a year earlier, the Chicago-based firm said today. Consumers spent $265.9 billion, resulting in a larger sales gain than the 2.4 percent increase ShopperTrak had predicted. Holiday sales have risen at least 3 percent every year since declining 1.2 percent in 2009.
Retailers piled on discounts to generate sales amid falling store traffic and flagging demand for goods, especially apparel. The effect on profitability may become known when clothing chains release December sales data tomorrow and retailers of all kinds report fourth-quarter results next month.
“The key is how did we do from a margin standpoint,” Bill Martin, ShopperTrak’s co-founder, said in a phone interview yesterday. “It seems to me a lot of the spending occurred during a time of heavy discounting, so the margins will be tight.”
ShopperTrak compiles sales and traffic data from devices in stores and receipt information, primarily from mall-based sellers of general merchandise, apparel, furniture and electronics. Holiday sales grew 3 percent last year, 3.4 percent in 2011 and 4 percent in 2010, according to the firm’s measure.
The National Retail Federation reiterated on Dec. 12 its projection that total sales will rise 3.9 percent in November and December, more than the 3.5 percent gain a year ago. MasterCard Advisors SpendingPulse said Dec. 26 that U.S. retail sales rose 3.5 percent from Nov. 1 through Dec. 24 compared with a year earlier, led by jewelry and children’s apparel.
To capture shoppers’ attention, stores deepened discounts, promoting extra deals in the last days before the Christmas holiday. Retailers including Neiman Marcus Group LLC offered as much as 75 percent off, and some, including Macy’s Inc. and Kohl’s Corp., kept stores open around the clock starting Dec. 22.
Holiday sales and store shopper activity account for about 20 percent of annual retail activity, ShopperTrak said.