The increase was fueled by a 15.5% surge in online purchases as well as a modest recovery in areas such as luxury spending and womens apparel as tracked by SpendingPulse. In 2008, retailers posted a drop in sales, their worst holiday performance in decades, after a global financial markets crisis. SpendingPulse has been tracking holiday spending figures since 2002, for the period from November 1 until Christmas Eve.
Last year the economy and consumer spending were in free fall. This year were talking about an environment that has stabilised, that has seen a leveling off, said Kamalesh Rao, director of economic research at SpendingPulse. The spike in online spending stems from greater consumer comfort with e-commerce, as well as from snowstorms that hit the East Coast and the Midwest in the final week before Christmas, stranding many shoppers at home. Online retail sales account for about 5% of overall sales.But Rao cautioned that the return of retail spending was tentative and still far below 2007 levels. Holiday sales can account for between 25% and 40% of annual sales for many retailers. The National Retail Federation has forecast a 1% decline in holiday sales this year. Luxury sales, which include sales at high end department stores such as Saks Inc and Nordstrom, recovered after a bloodbath in 2008, edging up 0.8%.
Jewellery sales shot up 5.6% and gathered steam in the final days before Christmas, Rao said, aided in part by Wall Street bonuses this year and the stock markets rally in 2009. Luxury and jewellery are very sensitive to whats happening in the financial markets, Rao said. Sales at specialty electronics chains such as Best Buy Co Inc rose 5.9%, in part because of pent up demand after sales fell sharply in 2008. Mens apparel sales rose 3.9%, while womens clothing sales edged down 0.3%, though sales picked up in December. Sales at specialty apparel retailers such as Gap Inc and Abercrombie & Fitch Co stabilised after 2008s disastrous holiday season, when sales fell by one-fifth. Sales were down 0.4%, but showed signs of life after Black Friday.