Holiday 2005: So Far, So Okay

Dec 29, 2005 12:04 AM  By

Back in November, predictions regarding holiday sales ( “Holiday Spending Predictions: Up, Down, and Sideways”) ranged from mildly optimistic (up 2%-4% over last year, according to the director of the Purdue Retail Institute and Center for Customer Driven Quality) to strongly so (up 6%, according to the National Retail Federation). So how did the season shake out? Again, it depends on whom you ask.

Most publicly traded retailers will release December sales results next week. In the meantime, MasterCard Advisors estimates that year-over-year holiday sales rose 5.2%, according to CNNMoney.com. Last year’s holiday sales had been up 8.1% from the previous year.

The Susquehanna Financial Group held to its forecast of a 3%-5% rise in holiday sales. Likewise, Britt Beemer, of retail consultancy America’s Research Group, told Dow Jones that he is sticking to his prediction of a 3.3% rise in sales from last year.

And the International council of Shopping Centers (ICSC) is sticking with its forecast of a 3%-3.5% lift in holiday sales. And as Michael Niemara, ICSC’s chief economist/director of research said in a statement, “the holiday shopping season is far from over, since about 60% of gift-card redemptions occur between Dec. 26 and the end of January.” The ICSC estimates that shoppers spent $35 billion-$40 billion on gift cards this season, up from $30 billion a year ago. The National Retail Federation, however, told “USA Today” that consumers bought $18.5 billion of gift cards in November and December, up 6.6% from last year.

Among the merchants that have issued statements so far, Denver-based eBags reported a 42% jump in holiday sales from last year. The online and catalog merchant of bags, footwear, and accessories credited much of its growth to the launch of its shoe site, 6pm.com (formerly Shoedini; see “Abracadabra: eBags’ Shoedini Is Now 6pm”), and a 665% leap in sales at eBags UK.

Online behemoth Amazon.com declared the 2005 holiday season its best ever, with more than 108 million items ordered. But another e-tailer, Overstock.com, admitted to a slightly disappointing season. “We’ve had a nice holiday season, just not as nice a season as we’ve had in the past or as I’d hoped for,” Patrick Byrne, president of the Salt Lake City-based discounter, said in a statement. He said that fourth-quarter growth was still twice the industry average but less than the three to four times the average that Overstock.com had enjoyed in years past.

As for that “industry average,” Anthony Noto, an analyst with Goldman Sachs, expects fourth-quarter e-commerce sales to be at least 16%-20% higher than last year’s. Research firm ComScore Networks estimates that nontravel online holiday sales rose 24% from last year, to $17.48 billion.