Holiday Sales Jump 5.5%

Early Estimates Indicate Robust Shopping Season for Retailers

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NEW YORK (AdAge.com) -- Though the East Coast capped the 2010 holiday shopping season with an epic winter storm, retailers still have plenty to cheer about.

Sales were up 5.5% for the period from Nov. 5 through Dec. 24, according to an estimate from MasterCard Advisors' SpendingPulse, a macroeconomic report tracking national retail and services sales. In 2009, holiday sales rose 4%, but those results were up against easy comparisons from the recession in 2008, when sales fell 6%.

Christmas sales were up 5.5% for the period from Nov. 5 through Dec. 24, according to an estimate from MasterCard Advisors' SpendingPulse.
Christmas sales were up 5.5% for the period from Nov. 5 through Dec. 24, according to an estimate from MasterCard Advisors' SpendingPulse. Credit: AP
Until the snow began snarling travel and shuttering malls Sunday, cold weather was a boon to many retailers. "The cold weather across much of the country in December appeared to be a positive for the apparel sector," said Michael McNamara, VP-research and analysis for SpendingPulse. "While there was some disruptive weather in the Midwest and the West Coast toward the end of the season, the conditions did not seem to negatively impact the national sales momentum. In some cases the weather may have also benefited the e-commerce channel."

Indeed, online sales jumped 15.4% to an estimated $36.4 billion for the period from Oct. 31 through Dec. 24, according to SpendingPulse. Sales passed the $1 billion mark on six days during the 2010 season, compared to three days during the 2009 holiday season. "Cyber Monday," the Monday after the Thanksgiving weekend, saw $999.3 million in sales, a 25.3% jump compared to a year ago.

"Today e-commerce accounts for a much larger share of overall retail sales compared to a few years ago," said Mr. McNamara. "And during this holiday season, it registered double-digit growth for six out of seven weeks."

Retail analyst Jennifer Black pointed out that many retailers offered free two-day shipping or two-day shipping for the price of regular shipping this holiday season. "We are not surprised that more and more consumers are flocking to the internet to shop, as it avoids the mall madness, sizes are generally available and online discounts are prevalent," she wrote in a report earlier this month.

Good deals combined with savings built up over the recession gave consumers the ability to spend. "If last year's holiday story was about gaining some stability, this year's is about getting back to growth," Mr. McNamara said. The apparel category and online retailers had strong year-over-year growth, he added, with a "noticeable" return to spending in big-ticket categories, such as jewelry, luxury and furniture.

Apparel sales jumped 11.2%, according to SpendingPulses' estimates, compared to a 0.4% decline during the 2009 holiday season. Menswear was up 10.5%, while women's apparel rose 5.6%. The jewelry and luxury categories also saw solid growth. Jewelry sales rose 8.4%, compared to a year ago, while the luxury category, excluding jewelry, was up 6.7%. The electronics category, however, sagged, with growth of only 1.2%.

Holiday spending began picking up in mid-November, leading to robust 6% sales growth at stores open at least a year, according to Kantar Retail. And improvements in various economic indicators prompted the National Retail Federation to raise its holiday guidance to 3.3% growth from 2.3% growth in mid-December.

"The start to the holiday season has surpassed all expectations," NRF President-CEO Matthew Shay said at the time.

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