NEW YORK (AdAge.com) -- The busiest Christmas shopping day of the year is now the day after Christmas.
Though all the numbers are yet to come in on a dismal holiday season, SpendingPulse, a macroeconomic report put out by MasterCard Advisors, estimates that retail sales, excluding fuel, were down between 2% and 4% from Nov. 1 through Dec. 24 compared with sales a year ago. The luxury category was hit particularly hard, with declines of more than 34%. Apparel sales declined in the 19% to 21% range, while electronics declined more than 26%.
"A difficult economic environment, combined with unfavorable weather during the last week of shopping, made 2008 one of the most challenging holiday shopping seasons in decades," said Michael McNamara, VP-research and analysis for SpendingPulse.
Still, anecdotal reports put shopping in the days after Christmas as among the busiest -- if not the busiest -- of the season. Todd Slater, managing director at Lazard Capital Markets, said that Friday, Dec. 26 may have proven busier than Black Friday (the day after Thanksgiving and the traditional start to the holiday-shopping season), with mall stores and parking lots reaching capacity.
Increased traffic levels, however, could do little to boost overall sales results, given that everything is on sale. Aeropostale is promoting 60% to 70% off, while JCPenney touts new reductions and a storewide clearance. Banana Republic is offering shoppers 60% off plus an additional 20% through Jan. 1.
Hoping to salvage what's left of the season, retailers are also seeking to instill a sense of urgency. Gap's website carries the message, "Hurry, your favorites are selling fast." And Kohl's website urges consumers to "Make your purchase now! If you see something you like, don't delay!"
Analysts said that post-Christmas sales are unusually steep, as retailers desperately look to unload merchandise that sat on store shelves through November and December. "The post-Christmas discounts were -- given the economic malaise, the short time period and the extremely poor weather -- among the deepest in recent memory, as retailers have now shifted to an all-out clearance sale to reduce higher-than-expected inventories," wrote Eric Beder, an analyst with Brean Murray, Carret & Co., in a research note.
It was a "perfect storm" of sorts for embattled retailers, said Mr. Beder, citing the poor economy, shortened holiday season and wet, snowy weekend before Christmas. "After a holiday season where retailers already received a lump of coal on so many levels ... they were forced to become even more aggressive to clear out goods in the post-holiday season, as it has become even more imperative in the current economic uncertainty for retailers to be clean for the relatively weak January and February selling periods."
Sales results for the month of December aren't due until Jan. 8, but it's already clear that the 2008 holiday season will be one for the record books. "Christmas 2008 for the retailers will likely go in the history books as one of the noteworthy negative notes. More importantly, however, it may go down as one in which the consumer psychologically reached a tipping point in which enough was really enough," said Jennifer Black, a retail analyst. "This, to us, does not mean the end of retailing. Instead, what it means to us is the intensification of more focused, deliberate, budget-based consumer spending."