Last-Minute Shopping Boosted Holiday Sales For Retailers

Last-minute spending by holiday shoppers countered a slow start to the holiday shopping season, enabling lots of retailers to beat sales expectations.

Reuters, citing industry research groups, reported that the increase in spending in December, coming off a lackluster November, was driven by an assumption on the part of consumers that deals would abound throughout the holiday season. RetailNext, the analytics firm, said sales at physical retailers rose 6.5 percent in the week that ended on Christmas Eve. For the rest of the month, sales fell compared to a year ago, noted Reuters.

Leading the sales surge in the end of December were furniture, home furnishing and men’s apparel, all of which drove retail sales 4 percent higher from the beginning of November to Christmas Eve, Reuters reported, citing data from MasterCard’s holiday spending report. The spending rush in December even resulted in Customer Growth Partners, a consultancy firm, raising its sales forecast for the holidays to an increase of 4.9 percent from an original estimate of 4.1 percent. Craig Johnson, president of Customer Growth Partners, told Reuters retail sales during the holidays will likely be the strongest since 2005 with the growth remaining up until the New Year, with an improving job market helping drive sales.

While an improvement in jobs and expectations that deals were hanging around were cited as reasons for the uptick in retail sales during the last week, President-elect Donald Trump had another idea why sales came in so strong: his victory last month. “The world was gloomy before I won – there was no hope. Now the market is up nearly 10 percent and Christmas spending is over a trillion dollars!” Trump wrote on Twitter, as reported by Reuters. The report noted the clear winner this holiday season was Amazon.com, while department store operators including Macy’s, J.C.Penney and Kohl’s didn’t fare as well, with many of them still discounting their products. J.C. Penney reportedly had the largest average discount, while jewelry retailers such as Tiffany & Co. and Signet Jewelers also struggled. It should be noted that the NRF is projecting holiday retail sales to reach $655.8 billion — not the trillion dollar mark estimated by consulting firm Deloitte earlier this year.