It wasn’t as merry a Christmas as retailers had hoped. The MasterCard Advisors SpendingPulse report found that consumers spent just 0.7% more than last year on clothing, jewelry, home products and electronics in the eight weeks leading up to Christmas.
Analysts had expected retail sales growth of between 3% and 4%, the Associated Press noted. This year’s year-over-year retail growth rate was the most anemic in four years. Sales during the final two months of the year can account for between 40% and 50% of many retailers’ annual sales.
Contributing to consumer caution this holiday season was the looming fiscal cliff of mandatory tax hikes and spending cuts that will kick in next year if congressional Republicans and the White House can’t come to a budget agreement.
Heavy snowstorms sweeping across the Midwest and the recent school shooting in Newtown, Conn., may also have dampened enthusiasm for holiday shopping. In Middle Atlantic states, the lingering effect of Hurricane Sandy also likely kept some shoppers home. Sales in the region states were down 3.9% compared to last year, while sales in the West and South rose, though not as much as analysts had hoped.
However, retailers could see a small boost this week as shoppers look for post-holiday bargains. One industry expert noted that the final week of December accounted for 15% of sales of the entire month