After all the hubbub about Black Friday and holiday gift-giving, it looks like shoppers held fast to their budgets, and their money, this year. Mastercard Advisors SpendingPulse reports that holiday sales went up a meager .7 percent this year, falling far short of the anticipated three to four percent. In fact, the number is in line with the tiny growth seen at the beginning of the recession, in 2008.
CBS News attributes the spending slowdown to a series of events that put a damper on the season: Hurricane Sandy, the massacre in Newtown, CT, and fears about the fiscal cliff.
“The numbers also show how Washington’s current budget impasse is trickling down to Main Street and unsettling consumers. If Americans remain reluctant to spend, analysts say, economic growth could falter next year,” CBS News writes. The article says we’ll know even more about the state of things when companies like Macy’s release their reports next week.
Now with all of this inventory, retailers will be forced to make even deeper price cuts. That’s great for us, but not so good for the stores, manufacturers, and other companies dependent on our lust for shopping. Consumer spending accounts for 70 percent of all economic activity in this country.
This article by Andreesen Horowitz general partner Jeff Jordan argues that malls are in steep decline because of the growing popularity of online shopping. But the new SpendingPulse report shows that online sales grew 8.4 percent, far lower than the 15 to 18 percent growth that was seen in the year-and-a-half prior. So even online sales took a hit. Although Reuters says that one-day sales (on Christmas, no less) were up 22.4 percent, higher than the 16.4 percent in 2011.
On the bright side, there are those sales to talk about. According to Dealnews (via Business Insider) today is going to be a busy day, with people returning or exchanging gifts and others spending their recently-gifted gift cards.
According to Dealnews, more than a third of the discounts are noteworthy, and clothing is where there are lots of deals to be had. If you’re looking for a new HDTV, you can probably get a good one at a good price right now as well.
We’ve talked about staying on budget, but taking a few bucks to splurge on a little something. Shoppers far and wide have stuck with the first part. If you haven’t taken advantage of the second, here’s your chance.