Early Returns Say Retailers’ Holidays Were Dismal

Strong winter storms reduced retailers’ chances of recovering from what has been pronounced the worst holiday season in decades.

According to preliminary data, sales fell between 5.5 percent and 8 percent this year. Sales of women's clothing dropped 22.7 percent, according to one account. Men's clothing sales dropped 14.3 percent and footwear sales fell 13.5 percent. Total sales of luxury goods — defined as the highest-priced tenth of jewelry, clothing and leather goods — fell 34.5 percent. Sales of electronics and appliances were down 26.7 percent. Only food sales were strong.

Economists had been predicting that this would be a poor holiday season for retailers as home prices plunged, unemployment rose and nervous consumers cut costs. Then came unexpected winter storms, snowing in would-be shoppers everywhere from Seattle to Las Vegas to Boston.

When gas and auto sales are excluded from the holiday period from November 1 to December 24, overall sales were down somewhere between 2 percent and 4 percent, according to SpendingPulse, a division of MasterCard Advisors that tracks total sales paid for by credit card, checks and cash. Recent gasoline prices were down 40 percent from a year before.

According to the Associated Press, a separate measure of holiday spending, from the International Council of Shopping Centers, is expected to fall 1.5 percent to 2 percent from last year, making this the worst season since 1969.
 

A full picture of the season won't be known until Jan. 8, 2009, when major retailers report their sales results.