Economy Watch: Retailers Push Hard Before the New Year
- Dec 27, 2011
Christmas is over and there’s really just one question—two actually—for retailers. One is how strong sales were during the run up to the holiday. The other is how strong they’re going to be during the last week of the year, which also happens to be the last week of the fourth quarter for many retailers or at least a psychological goal post for most of them, whenever their fiscal year begins. In any case, after-Christmas, pre-New Year, promotions and discounts are in full force this week.
The pre-Christmas shopping numbers aren’t in yet, but according to ShopperTrak, which tracks retail and mall foot traffic, sales increased nationwide during the week ending Dec. 17, putting this December on track to have higher retail sales than December last year. During the week ending Dec. 17, sales were up 21.7 percent compared with the week ending Dec. 10—little surprise there, as shoppers hit the malls and the big boxes and the community centers and the strip centers to acquire the gifts they need to feel festive. The Dec. 17 week sales were also up compared with the same week a year earlier, but only by 1.3 percent.
Anecdotal evidence suggests that it’s going to be a peculiar shopping season, when all is said and done, characterized by higher sales but also deeper discounts. Before Christmas, large numbers of merchants were offering discounts and other enticements to get shoppers in the door, but also to clear out an excess of inventory that they ordered during brief fits of optimism a few months ago. The holiday season this year probably won’t be bad, but a record-breaker doesn’t seem to be in the cards, leaving some retailers (especially clothiers that depend on the whims of youth) with a little too much stuff left over.
New home sales inch upward in November
The Census Bureau reported on Friday that new home sales were up in November by 1.6 percent to an annualized rate of 315,000 units. That’s the highest rate in seven months, that is since before the nervous upsets of the summer. Yet new homes sales are still on track for a lousy 2011 in terms of total houses sold. It looks like the year will not even beat the sales total of 2010, which was 323,000 units.
Compared with November last year, sales were up 9.8 percent this November, but that’s better than it sounds, since even a year ago most U.S. markets were still hung over from the artificial stimulation of the homebuyer tax credit. Perhaps most important for the prospect of long-term sales increases in 2012 is the inventory of new homes on the market. Historically speaking, the number of new single-family homes for sale in November was minuscule, only 158,000 units, or enough to last about six months at the current rate of sales.
The equities markets were closed on Monday for the legal Christmas holiday, but Wall Street had a holiday bounce—a modest Santa Claus rally—on Friday, with the Dow Jones Industrial Average gaining 124.35 points, or 1.02 percent. The S&P 500 was up 0.9 percent and the Nasdaq advanced 0.74 percent.