THE HARSH REALITY of pink slips flying, combined with the potential for American bombs dropping on Baghdad, kept nervous shoppers out of the malls in the 2002 holiday season. According to the National Retail Sales Estimate (NRSE), a compilation of data released by Chicago-based ShopperTrak RCT, U.S. retail sales for the month of December inched upward by a mere 1% from the total posted in December 2001. ShopperTrak CIO Barb Johnson says that sales simply “have not been good,” although she notes that it’s a little too early as of press time for a detailed analysis of holiday retail sales statistics.
Though NRSE data goes back only to 1992, according to NRSE creator Michael Niemira, vice president for research at the Bank of Tokyo-Mitsubishi, year-over-year holiday sales growth for 2002 was the lowest since 1990. Niemira says December’s retail sales increase, “put together with a 3% November increase, puts the season somewhere around 2%. That would be one of the weakest seasons.”
Nevertheless, he points out, “the tail end of the season seems to have been very strong,” driven by post-holiday shoppers cashing in an increased number of gift certificates bought this holiday season, according to ShopperTrak RCT. However, in the wake of weak holiday sales predictions from such benchmark merchants as Wal-Mart and Federated Department Stores Inc., soft retail sales will continue in 2003.
“I think you’ll see some decent performance among some retailers even when they report their monthly holiday sales,” says Niemira. “But I think the risks are very much going to be with us, early into next year, given the fact that we may have a war situation as of January. ABC News/Money magazine put out a year-end poll, and one of the things they found was that Americans were markedly more fearful about their prospects for 2003, and of course war is one of the key reasons for that. I think those risks are going to be detrimental to sales.”