January 3, 2011
I think you will be happy to know that preliminary retail sales data is reporting that shoppers spent more this holiday season than they did even before the recession began! Can this be the light at the end of the tunnel? The sign we have all been waiting on?
Retail spending rose 5.5% in the 50 days before Christmas 2010, compared to the same period in 2009, exceeding even the most optimistic forecasts and making this pre-Christmas sales increase the greatest in five years, according to MasterCard SpendingPulse™, a unit of MasterCard Advisors. That’s after a 6% drop in 2008 and a 4% uptick last year. Spending reached about $584.3 Billion this season.
The following are among the theories analysts offered for the rebound in spending while the unemployment rate remained high.
*Stocks have risen to their highest levels in two years, giving those with higher incomes greater freedom to spend.
*Consumers have expressed rising confidence for the last five months, according to government surveys.
*The luxury segment started heating up last summer, which had a trickle-down effect from upper-tier consumers to mid-tier consumers.
Several retailers will report December sales in January. A blizzard on the East Coast may have kept shoppers away on December 26, when retailers typically see increased store traffic for exchanges, returns and gift card use, but analysts say the stores would not lose those sales — they would just be pushed later into December or January.
Source: The New York Times, Dec. 27, 2010