Retailers count on the holiday season to bring the lion’s share of their profits every year. But this year, they were very disappointed.
According to the Associated Press, analysts had expected holiday sales to grow 3% to 4% this year. Instead, sales grew a measly 0.7% compared to last year, which is the slowest growth rate since the height of the recession in 2008. Sales both in-store and online were lackluster.
Some are blaming it on Hurricane Sandy, grief over the Newtown, CT, shooting and the distraction of the election. Sales declined by 3.9% in the mid-Atlantic and 1.4% in the Northeast compared with last year, which strongly points to the effects of Sandy’s damage to these areas.
But one of the main reasons for the slow sales is uncertainty over the fiscal cliff. As we reported last week, consumers are cutting back on spending because they fear higher taxes and less help from social programs next year. And hey, if consumers are finally making a list and sticking to their budgets, we can get behind that.
We’ll get a clearer picture of the seasonal spending next week when large department stores like Macy’s and Target report their revenue figures.
Still, retailers have this final week to make up the difference, and that’s a good thing for you if you have some shopping or exchanging to do–sales are likely to be even steeper. Just make sure you read our tips for post-holiday shopping before you go!