Year-End Sales May Not Signal Recovery

Strong holiday sales are buoying some small businesses and blunting losses from a mostly dismal year, but the increase may not sustain them into 2010.

Case in point: Aunt Sally’s Praline Shops, the New Orleans pecan candy maker that we’ve been chronicling along with other businesses through this holiday season.

CEO Frank Simoncioni said today that December sales are up 30% over 2008. But for the year, total sales are only on pace to rise 5%. “I’m happy for December, but the rest of the year, all year long was really a drag. We may not be able to offset all those losses throughout the year just because of holiday sales,” he says.

Simoncioni increased staff from about 35 to 52, but most of those positions are seasonal and won’t continue into next year. Aunt Sally’s expects to turn a profit on sales of about $3.5 million. But higher prices for ingredients like sugar (which has doubled in price this year) are squeezing the candymaker’s margins.

All three of Aunt Sally’s businesses — a retail store, wholesale, and online sales — have seen sales grow. The company has gotten national exposure with spots on QVC and the Today Show. The shop is busy enough that they have to ask callers to hold immediately.

Still, Simoncioni questions whether the holiday rush will give way to another slow year or if the growth he sees now is the start of a sustained recovery. Sales tax receipts in New Orleans have been below expectations, meaning shoppers and tourists haven’t been as spending as much as the city hoped. “I don’t know what to expect. The recession seems to be lasting longer than we thought,” he says. For now, he’s thankful for year-end sales that will help Aunt Sally’s end the year in the black.

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