The big start to the holiday shopping season that came at the end of November ended in a fizzle and the lackluster performance could mean that 2013 will get off to a slow start.
According to The Associated Press, sales of electronics, clothing, jewelry and home goods in the two months before Christmas increased 0.7 percent compared with last year. That, the AP reported, was far below the 3 to 4 percent growth that had been expected and was the worst year-over-year performance since 2008.
Following the Thanksgiving Day shopping season kickoff, the National Retail Federation said that 247 million customers visited stores from the Thanksgiving Day season kickoff, through Black Friday, Small Business Saturday and the conclusion of the weekend on Sunday. Even more took advantage of online sales on Cyber Monday. According to the National Retail Foundation, the amount that shoppers spent increased 12.8 percent over the same period last year. The average shopper spent $423, up from $398 last year.
But the spending didn't hold up. Experts say everything from Superstorm Sandy to the uncertainty about federal spending cuts and tax increases played a part in consumers holding on tighter to their cash.
According to the AP, shopping over the past two months was weakest in areas affected by Sandy and a more recent winter storm in the Midwest. Sales declined by 3.9 percent in the mid-Atlantic and 1.4 percent in the Northeast compared with last year.
People also are concerned about the inability of Congress to come to a deal to avoid the so-called fiscal cliff of expiring tax cuts and mandatory government spending cuts.
The AP notes that the sales data released Tuesday from Mastercard Advisors SpendingPulse is just the first snapshot of retail spending over the holidays. Retail spending makes up about 70 percent of all economic activity, so sales and earnings are a good indicator of the health of the economy. In the coming weeks, retailers will come out with their own numbers on holiday sales.
While we can't do anything about Mother Nature's impact on shoppers, we can do something about the uncertainty within our own government. Congress and the President are back in Washington this week to continue to work on a deal to avert the so-called fiscal cliff. Hopefully they will recognize the damage that their inaction is doing to our economic recovery and work to finalize a deal that will bring back some of the consumer confidence that has been draining away due to their partisan bickering.