Shoppers disappoint retailers this holiday season

Sales grew in the two months before Christmas, but not to the levels forecast by retail analysts, figures show.
FROM STAFF AND WIRE REPORTS Modified: December 26, 2012 at 9:39 pm •  Published: December 27, 2012

Half of what Kandi Jones bought during Black Friday sales was returned to the store when she realized she had overextended her budget.

“It was that kind of year,” the Edmond resident said.

Across the U.S., shoppers like Jones spent cautiously this holiday season, a disappointment for retailers who slashed prices to lure people into stores and now must hope for a post-Christmas burst of spending.

Sales of electronics, clothing, jewelry and home goods in the two months before Christmas increased 0.7 percent compared with last year, according to the MasterCard Advisors SpendingPulse report.

That was below the healthy 3 to 4 percent growth that analysts had expected — and it was the worst year-over-year performance since 2008, when spending shrank sharply during the Great Recession. In 2011, retail sales climbed 4 to 5 percent during November and December, according to ShopperTrak.

Jones, who was purchasing wrapping paper and gift sets marked 50 percent off at the Quail Springs SuperTarget store Wednesday, said she watches sales like those going on after Christmas to buy what she needs at a discount. Most shoppers in the store Wednesday morning were concentrated in the holiday clearance aisles.

At the beginning of the holiday season, the National Retail Federation estimated the average holiday shopper would spend about $750 on gifts, decor, greeting cards and other items, up slightly from the year before.

However, this year's shopping season was marred by bad weather and rising uncertainty about the economy in the face of possible tax hikes and spending cuts early next year. Some analysts say the massacre of schoolchildren in Newtown, Conn., earlier this month also may have chipped away at shoppers' enthusiasm.

Retailers still have time to make up lost ground. The final week of December accounts for about 15 percent of the month's sales, said Michael McNamara, vice president for research and analysis at MasterCard Advisors SpendingPulse.

Indeed, on the day after Christmas, there was a crowd equivalent to a busy weekend day at Lenox Square Mall in Atlanta by midday. Laschonda Pitluck, 18, a student in Atlanta, had held off earlier because she's a student and saving all her money for college. Last year she spent more than $100 on gifts but this year she's keeping it under $50.

She found 50 percent off things she bought, including a hoodie and jeans for herself at American Eagle and a shirt at Urban Outfitters. She said she wouldn't have bought the clothes if they hadn't been 50 percent off.

“I wasn't looking for deals before Christmas. I waited until after,” she said. She bought boxers for her boyfriend, and was looking for a hat but couldn't find one.

In New York, the Macy's location at Herald Square also was buzzing with shoppers. Ulises Guzman, 30, a social worker, said he held off buying until the final days before Christmas, knowing the deals would get better as stores got desperate. He said he was expecting discounts of at least 50 percent.

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