Holiday Sales Watch, Report 3: A Modest End to an Up-and-Down Season

Soft last-minute rush countered by solid after Christmas activity

ALBANY, NY (01/02/2008)(readMedia)-- The odds were stacked against them, but the majority of New York state’s retailers still managed to eke out a modestly successful holiday season. With week-before-Christmas sales deemed disappointing by some, but post-holiday spending off to a strong start, surveyed retailers awarded the 2007 season with a “C+” letter grade, down slightly from the grades given in recent years.

Although not as strong as hoped for, more than half of retailers polled by the Retail Council of New York State said that their week-before-Christmas sales were better than (35%) or the same as (17.5%) their sales during the same week in 2006. Half of survey participants reported that week-before-Christmas sales met their expectations. Merchants reported an after-Christmas boon – nearly three quarters of respondents described their after-Christmas sales as better than or the same as 2006.

Retailers throughout the state reported the results through the Retail Council’s annual “Holiday Sales Watch,” a periodic snapshot of sales activity in stores small and large. This third Holiday Sales Watch was conducted Dec. 27 and 28 and gauged retailers’ perception of sales activity the week before and just after Christmas. This report concludes the Council’s assessment of the holiday season.

The final grade isn’t far from what merchants anticipated. A September-October 2007 forecast survey conducted by the Retail Council revealed that 78 percent of participating members expected sales to be the same as or better than sales in 2006. In the end, 60 percent of surveyed merchants declared the 2007 holiday season to be the same as or better than 2006.

“The week-before-Christmas rush that merchants were counting on just didn’t materialize for many,” said Retail Council President and Chief Executive Officer James R. Sherin. “Still, the strong post-holiday activity helped push this season to a decent letter grade.”

The 2007 holiday shopping season got off to a good start as nearly 80 percent of surveyed merchants said their sales for Black Friday weekend were the same as or better than their sales over the same period of time in 2006. Retailers’ optimism continued to prevail through mid-December with nearly 60 percent reporting they were pleased with their sales, although many were relying on a robust week-before-Christmas to finish the year.

Gift card redemption was key to the immediate after-Christmas push. More than 85 percent of merchants reported that their gift card/certificate sales were the same as or better than gift card/certificate sales in 2006.

In addition to general economic malaise, thanks in part to high gas prices and the housing slump, survey respondents blamed Mother Nature for contributing to the soft season.

“Every time people wanted to shop, we had an ice storm or snow,” said one disappointed survey respondent.

Others, however, were thankful for the wintery conditions.

“Last year, people were doing their shopping in shorts,” said a satisfied member. “We really needed the snow to get people thinking about boots, sweaters and coats.”

“Retailers can do no more than fully prepare and respond to their customers’ demands. After that, the consumer is in control of how their dollars will be spent,” said Mr. Sherin. “Although it was a modest sales season for many of our members, given the economic hurdles the industry had been facing for much of the year, it could have been worse.”

Hot Sellers for the 2007 holiday season

For Girls: Barbie, Bratz, Dora the Explorer, Disney Princess, Disney Hannah Montana, Nintendo Wii, Webkinz, Elmo, American Girl

For Boys: Transformers, video games, Nintendo Wii, Cars (generic), Spider Man, LEGOS, Thomas the Tank Engine, XBOX 360, Elmo, remote controlled cars and trucks

For Adults: Home electronics (flat screen, high definition TVs, I-Pods, digital cameras, digital photo frames), apparel, accessories, jewelry (especially diamonds, Journey jewelry and sterling silver), books and DVDs

About the Retail Council of New York State: The “Voice of Retailing” in New York state, the Retail Council represents thousands of member stores of all size and variety. The Retail Council offers money-saving group benefit programs and government relations expertise to its members. For more information, please visit www.retailcouncilnys.com.

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