Last-minute spending surge lifts U.S.
holiday shopping season
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[December 28, 2016]
By Nandita Bose
CHICAGO (Reuters) - A jump in consumer
spending in the final stretch of December significantly offset a slow
start to the U.S. holiday shopping season, and is likely to help many
retailers beat sales forecasts, industry research groups said on
Tuesday.
The December spending boost is in contrast to a muted November, when
early holiday promotions and expectations among consumers that deals
would always be available took a toll. Spending over the Thanksgiving
weekend in November fell 3.5 percent from a year ago despite a strong
jump in online sales, according to the National Retail Federation.
"It was a hot start with Cyber Monday, followed by a lull for the last
couple of weeks and then a big-bang finish," said Pete Madden, a
director at retail consultancy AlixPartners.
Sales data released on Tuesday showed the major shift in fortunes in
late December
Brick-and-mortar sales in the week ending Dec. 24 rose 6.5 percent
year-over-year after having fallen for the rest of the month, according
to data from analytics firm RetailNext.
![](http://archives.lincolndailynews.com/2016/Dec/28/images/ads/current/graue_sda_2016.png)
Strong demand for furniture, home furnishings and men's apparel from the
start of November through Christmas Eve pushed U.S. retail sales up 4
percent, higher than the previously expected 3.8 percent, according to
data from MasterCard's holiday spending report, also released on
Tuesday. The report, which tracks spending by combining sales activity
in MasterCard's payments network with estimates of cash and other
payment forms, offers an early look into how the holiday season shaped
up.
Official government data and results from retailers will not be
available until next month.
The jump in spending prompted a prominent retail consultant to raise his
holiday sales forecast. Craig Johnson, president of consultancy Customer
Growth Partners, told Reuters that he now estimates sales growth of 4.9
percent in November and December, up from his initial estimate of 4.1
percent.
Johnson said he expects this year to be the strongest since 2005, and
sales momentum is likely to remain strong until the New Year. There is
growing evidence that an improving job market, lower gasoline prices and
growing consumer optimism all contributed to the surge.
President-elect Donald Trump attributed the spending increased to his
impending arrival at the White House.
![](http://archives.lincolndailynews.com/2016/Dec/28/images/ads/current/pestcontrol_bch_termites.png)
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![](../images/122816pics/news_g9.jpg)
People cross Broadway with shopping bags in Manhattan, New York
City, U.S. December 27, 2016. REUTERS/Andrew Kelly
![](http://archives.lincolndailynews.com/2016/Dec/28/images/ads/current/brickey_lda_061314.png)
"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.
Whatever the reason, shoppers remained ebullient.
"I'm here just to shop," said Eddy Flores, 46, as he lugged three bags
stuffed with clothing through Macy's in New York City. He was there to
take advantage of post-Christmas deep discounts.
LOSING OUT
Despite the late-December surge, not every retailer will benefit.
Department stores like Macy's <M.N>, J.C. Penney <JCP.N>, Kohl's Corp
<KSS.N> and others are still heavily discounting items, as growth in
women's apparel remained weak.
J.C. Penney offered the deepest average discount level of any retailer
this year, according to retail pricing and data analytics firm Market
Track.
Jewelry retailers also had a lackluster season that could hurt the likes
of Tiffany & Co <TIF.N> and Signet Jewelers <SIG.N>, industry groups
said.
The verdict on electronics as a category remained mixed. MasterCard said
electronics sales were weak while analytics firm Slice Intelligence said
electronics was a top revenue-earner, with Best Buy <BBY.N> and Apple
Inc <AAPL.O> gaining share the week leading up to Christmas.
![](http://archives.lincolndailynews.com/2016/Dec/28/images/ads/current/flossies_sda_CHRISTMAS_2016.png)
The biggest beneficiary of the holiday season continued to be Amazon.com
Inc <AMZN.O>, which outperformed its rivals again this year, research
firms said. Amazon on Tuesday called the holiday season its "best ever."
(Additional reporting by Tim Baysinger in New York; Editing by Leslie
Adler)
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