Holiday Retail Sales Barely Budge Over Last Year
A quick note on those 2012 holiday retail sales figures ….
The Christmas retail sales numbers are beginning to be released, and let’s just say it wasn’t a very merry holiday season for the nation’s shopping sector.
A Christmas tree inside a home. (Photo credit: Wikipedia)
According to MasterCard Advisors SpendingPulse, 2012 holiday sales increased by a grand total of 0.7 percent from last year. After inflation, that means, as my grandfather used to say, bupkis. Original projections had Americans spending between three and four percent over last year. While we are a few weeks away from final sales figures, and the numbers could still change, that’s sure looking less likely than it did a few months ago.
I can’t say I am surprised.
The Helaine Olen personal economic meter was flashing yellow several weeks ago. My evidence? By mid-December it was clear that there was a distinct lack of consumers carrying multiple shopping bags in midtown Manhattan. I’ve lived in this city on and off my entire life and one of the things I’ve learned is that if you don’t see lots of people carrying multiple Macy’s bags in the days before Christmas, something is not right in the world. Yes, yes, I know, Internet sales are greater than ever but let’s get real for a minute. No one has ever come to New York City, seen one of those “My Grandma Visited New York City and All I Got Was This Lousy T-Shirt” t-shirts, gone back to what we New York City natives like to call flyover country, and ordered it online.
No doubt you will read lots of articles fingering various culprits for the bad numbers over the next several days. Currently popular explanations include Hurricane Sandy forcing many to spend on home repair instead of gifts and the Newtown massacre leaving many in a less than festive mood. Call me skeptical. The vast majority of people – even in the hard-hit New York City region – did not pick up expensive fix-it bills post-Sandy. As for the Newtown shootings, they occurred on December 14. Where were all the shoppers before that date? Hanging their heads in despair over the sad fate of General Petraeus and his many women? Doubtful.
Slightly more plausible is the theory that constant coverage of the Fiscal Cliff scared many consumers into keeping their wallets mostly shut. Bankrate.com, for example, found that one-third of those they surveyed said they were concerned enough about possible tax increases that they were spending less than they had previously planned. However, it’s also worth noting that Bankrate.com also found many more people earning less than $30,000 expressing Fiscal Cliff financial fears than those bring home greater sums of money. That doesn’t exactly explain why luxury retailer Saks ran what could be termed a Black Wednesday Boxing Day Sale for the upscale masses, offering 70% off designer goods for a limited time this morning.
So a few explanations you won’t hear about, but are equally, if not more, plausible. It might just be that we are in a recession and don’t know it yet. The highly respected Economic Cycle Research Institute, for one, has been claiming the United States has been on an economic downslide since July. Another factor, and one that could explain Saks’ blowout sale: Wall Street layoffs. Companies including Citigroup, Bank of America and HSBC Holdings have announced have announced mass job cuts over the past few months. As for Wall Street’s fabled bonuses, it was recently reported that they would be half of what they were in 2006.
No doubt the personal finance scolds will be proclaiming a return to reason for millions of Americans after decades of spending, while those with a broader economic focus will remember consumer spending accounts for about 70 percent of the United States economy, and blame shoppers for putting the kibosh on a good thing if it turns out the Economic Cycle Research Institute is on to something.
What no one seems to be saying is that for better or worse, Americans like to shop. We do it till we can’t. If the Christmas sales season is weak, it definitely means one thing: There are a lot of people out there in economic pain. You don’t have to be a fan of the shop-till-you-drop culture to think that’s not good, not at all.
About Helaine Olen
I am the voice of The Bills, a column about the intersection of money and life, at Slate. At Inc., I contribute to the Spread the Wealth personal finance column. My work on politics, economics, workplace culture and women’s issues has been published in numerous other print and on-line publications, including The New York Times, The Wall Street Journal, The Washington Post, The Atlantic, Salon, Pacific Standard, and The Los Angeles Times, where I wrote and edited the popular “Money Makeover” feature.
I'm the author of the critically acclaimed book Pound Foolish: Exposing the Dark Side of the Personal Finance Industry, and The Index Card: Why Personal Finance Doesn’t Have to be so Complicated, which I co-wrote with Harold Pollack.
What else? I’m a passionate bibliophile, a fan of 1970s pop music and a lover of rummage sales. I live in New York City.
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