Retail sales showed a steep drop last week revealing that retailers’ efforts to draw shoppers into stores prior to Thanksgiving is not making them extend their shopping and spending over a longer period — it’s just getting them to shop sooner.
The Retail Economist-Goldman Sachs Weekly Chain Store Sales Index plunged 6.1 percent for the week ended Dec. 3 “as consumers took a breather from the Black Friday shopping,” said Michael Niemira, chief economist of The Retail Economist LLC, in his weekly report.
On a year-over-year basis, sales showed a 1.8 percent gain.
“As retailers increasingly try to pull holiday sales forward earlier into November and entice consumers with promotions during the Thanksgiving Day week — including Thanksgiving Day — the post-Thanksgiving week has seen a sharp fall-off sequentially with Thanksgiving week, even adjusting for seasonal patterns,” Niemira said.
“With both Christmas and Hanukkah falling on the same day this year, holiday gift purchases are likely to get an extra boost just ahead of Dec. 25 this year,” he added.
Despite the decline, online traffic for this past weekend was strong. In a separate report from Verizon Enterprise Solutions, the firm’s Holiday Retail Index for the Dec. 3-4 weekend showed a year-over-year e-commerce traffic gain of 4 percent on Saturday and 10 percent on Sunday. Verizon said the increases reinforce “the significance for getting promotions right when consumers turn their attention to holiday shopping.”
Michele Dupré, group vice president for retail, distribution and hospitality with Verizon Enterprise Solutions, said the “healthy spike in weekend traffic demonstrates the importance of getting promotions right when consumers are focused on ticking items off their holiday shopping lists.”
“With special offers now a holiday season norm, the challenge is in spreading promotions out to keep consumers interested and coming back,” she added. “It’s early in the season — with Christmas and Hanukkah three weeks out — and there’s plenty of selling still to be done.”
In a weekly analysis of the department store segment, analysts at Telsey Advisory Group said in that “terms of holiday shopping, we believe the extended cyber sales drove an increase in online orders. We expect promotions to temper over the next two weeks and to once again pick up the last 10 days before Christmas as consumers shop last-minute gifts.”