Consumers are visiting stores more often, but sales haven’t necessarily kept pace with store traffic, prompting ShopperTrak to lower its spending forecast for the holiday season. Still, judging just what is happening in the current holiday season may have to wait until the end of January.
For the week ending December 15, ShopperTrak reported retail foot traffic increased 15.1% over the previous week, while sales advanced 16.4% in the same period. However, both traffic and sales slipped from the same period last year, with foot traffic down 4.4% and sales down 4.3%.
“Hanukkah-related shopping helped boost retail sales last week, but many consumers delayed their Christmas shopping, and with good reason,” said Bill Martin, ShopperTrak founder. “They saw 32 shopping days between Black Friday and Christmas, the longest interval possible.”
Last week, when the ShopperTrak results were finalized, the company predicted that December 22 would help close out the largest sales volume week of the year by becoming one of the five busiest shopping days of the season.
Despite the anticipated last-minute rush, ShopperTrak reduced its forecast for the holiday season, which it defines as the months of November and December. ShopperTrak said holiday season sales would increase by about 2.5% over last year, down slightly from the 3.3% advance it projected in September. Several factors contributed to the company’s decision to lower its forecast, including heavily discounted merchandise and the impact of Hurricane Sandy. Still, ShopperTrak maintains that holiday season foot traffic would increase 2.8%, adding that the gain represents the first increase in retail foot traffic during the holiday season since the recession in 2008.
Pundits are lining up to predict why holiday sales won’t live up to the National Retail Federation prediction of a 4.1% gain. Reasons given, including Sandy, range from the Newtown, CT, shootings dampening holiday spirits, to fiscal cliff concerns that may or may not be worrying the average consumer to soft consumer wages despite recent increases in personal income.
However, the figures amassed may be saying more about changes in consumer shopping behavior than they are about holiday-related spending. According to an NRF holiday survey conducted by BIGinsight, consumers in the United States, on average had, completed 56.5% of their shopping by December 10, up from the 46.5% last year and the highest percentage in the survey’s 10-year history.
Both Black Friday week and the seven days after saw traffic and sales up from last year, ShopperTrak said, although the next two weeks were softer compared to 2011. Consumer shopping tactic changes ushered in by the recession may have influenced mid-month retail sales softness. Consumers have become more flexible in their holiday purchasing, so they are not bidding up the price of a few key items. Shoppers also are acting on their knowledge that retailers will present more bargains in the days before Christmas, pushing more sales to late season. Further, consumers have become increasingly comfortable with holiday gift cards. By December 10, and long before consumers were likely to despair of finding something for the hard to please names on their shopping lists, 39.2% told BIGinsight and NRF that they already had bought gift cards, the highest proportion the annual holiday study had identified and a significant increase over last year. Add the impact of online shopping, which isn’t always fully represented in traditional studies, as another factor to consider.
Ultimately, whether the holiday season proves merry or morose for retailers may depend upon the strength of online operations and the ability to draw gift card spending, a reality that may spell more of a spread between winners and losers. In such a situation, any average figure, good or bad, may disguise what really happened, which may necessitate a retailer by retailer evaluation of the 2012 holiday season.