More Americans shopped over the holiday weekend but they spent less per person, leading to a 2.7 percent decline in total spending from 2012, the National Retail Federation reported.
In all, 141 million U.S. adults spent an average of $407 apiece in stores and online from Thursday through Sunday, for a total of $57.4 billion, the trade group said. That compared with 139 million people who spent an average of $424 in 2012, for a total of $59.1 billion.
Click here for details on the weekend’s results.
Separately, ShopperTrak, a Chicago-based retail analytics firm, reported brick-and-mortar store sales up 2.3 percent on Thanksgiving and Black Friday to $12.3 billion, as foot traffic in stores increased by 2.8 percent. Black Friday alone showed double-digit declines in sales and store visits, ShopperTrak said.
Both the retail federation and ShopperTrak agreed that online spending was up. The federation said it spiked by 4.3 percent to $25 billion over the four-days, and that doesn’t even count today’s Cyber Monday spending, which was predicted to rise.
The results might seem to fall short of the retail federation’s 2013 forecast for the “holiday season,” which called for a spending increase of 3.9 percent to $602 billion this year, bigger than last year’s 3.3 percent increase.
But no one should worry about the declines for several reasons. Retailers say they are seeing deals spread out longer over the holiday period, so the so-called crucial Black Friday period matters less than it did before.
“Retailers will continue to aggressively promote their in-store and online offerings, looking to entice today’s very budget-conscious and value-focused shopper,” retail federation president Matthew Shay said in the federation’s press release.
More to the point, Christmas shopping is not as large a part of the economy as the retail industry would have us believe. Spending in the holiday season under the retail federation’s definition includes most retail sales in November and December, including groceries, home medical equipment and auto parts, though it excludes restaurants, vehicle sales and gasoline.
Even that larger definition of retail spending accounts for less than one-fifth of the U.S. economy, and spending for Christmas gifts is about 1 percent or less of the economy.
So, while the overall up-and-down figures do matter, the spending is not a main driver of the economy – especially considering the value of retail goods that are imported, the low wages paid by the industry and other factors.
It does matter to community development — how we feel about where we live — and it’s certainly a reflection of how the economy is doing. To that end, we already know we are living in times of economic growth, with record stock market values, but not shared prosperity.
State-by-state numbers are not available and anecdotal evidence about how retailers are doing in Connecticut is highly unreliable. A recent UConn/Courant poll showed that 10 percent of Connecticut shoppers said they would have higher holiday spending this year, while 30 percent said they would spend less.
The Northeast is clearly lagging the rest of the nation according to ShopperTrak, which said the region had an in-store sales decline of 7 percent Thursday and Friday, while the South, Midwest and West all showed increases ranging from 3.3 percent to 6 percent.
By all accounts, retailers’ margins are squeezed by more online shopping and more promotions, and certainly we’re living in difficult times for retailers that aren’t online. The weekend survey by Prosper Insights & Analytics showed that 55 percent of U.S. adults, or 132 million people, planned to shop online on Cyber Monday, up 1.9 percent from last year’s total.
But the myth that they’re spending work time buying stuff remains just that, as 87 percent said they would use a computer at home, compared with 12 percent who admitted they would shop from the office.
Will Oremus of Slate.com posted a great screed on why Cyber Monday is “the dumbest fake holiday of the year.”
It’s hard to believe the vast majority of Cyber Monday shoppers were buying from home. But looking at another trend for 2013 — shopping on Thanksgiving Day — it wasn’t worth the trouble for retailers if we believe the retail federation’s report. The decline in overall weekend sales, came despite 45 million shoppers trekking out on the holiday itself, a 25 percent increase.
Maybe we could see some collusion next year among retailers: They stay closed on Thanksgiving and we all benefit.
Finally, this nice reminder from Connecticut ubiquitous tax man, Revenue Services Commissioner Kevin B. Sullivan: Regardless of whether your online retailer collects the state sales tax of 6.35 percent, you owe it. So be sure to declare that purchase on your 2013 returns.