2012 Holiday Retail Sales: “Barack’n Pneumonia” and the Sandy Flu

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  • on December 26th, 2012
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lumpofcoalHate to say I told you so. Really. However, the numbers don’t lie, and as I anticipated, 2012 Holiday Retail Sales proved lackluster with MasterCard Advisors SpendingPulse reporting Retail sales grew by a meager 0.7 percent from Oct. 28 through Dec.24th. versus a 2 percent gain during the same period last year.

As Hurricane Sandy left her mark on the Eastern Seaboard, Luxury sales in particular took a hit as I mentioned in a previous post, with New Yorkers alone accounting for 20 percent of luxury spending nationally. Pundits like to remark that the luxury spender is perpetually immune from such dips in the economy, yet small ripples can create giant waves, and the numbers reveal that the 1% just cannot always prop up a staggering economy, no matter how promotional the environment. Prepare for retailers to catch the Sandy Flu as they report Same Store Sales results for December Next week.

This clearly begs the question of whether the Thanksgiving “Grey Area” of extended retail hours and Holiday store openings even matters in the grand scheme. Aside from a storm ravaged consumer on the East Coast, shoppers clearly had a “Merry Cliffmas,” with many wage earners receiving notice from their employers last week that income tax witholdings would eat up even more of their paycheck in 2013. My contention is that this drastically affected “Super Saturday” retail sales, and may have even spurred massive pre-holiday returns. One forgets that merchandise returns and return fraud is a massive threat to retailers, accounting for $3.5B in losses last year according to the National Retail Federation. Moreover, I believe the country is experiencing a vast malaise, from mass shootings in CT to fear of the unknown as tax increases and healthcare increases loom. Add to that an economy in stagflation and 8% unemployment and its no wonder that retailers are now experiencing “The New Normal.” It’s worse than you think.

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