Shoppers Stay Home and Gorge Themselves on Leftovers

November 30th, 2014 11:06 pm | by John Jansen |

Via Bloomberg;

Post-Thanksgiving Spending Tumbles 11% as Shoppers Stay Home (2)
2014-11-30 21:52:50.439 GMT

(Updates with online spending in seventh paragraph.)

By Lauren Coleman-Lochner
Nov. 30 (Bloomberg) — The holiday shopping season got off
to a slow start in the U.S. this weekend, with consumers cutting
spending by an estimated 11 percent and far fewer bargain
hunters hitting stores than predicted.
Consumer spending fell to $50.9 billion over the past four
days, down from $57.4 billion in 2013, the National Retail
Federation said today in a statement. It was the second year in
a row that sales declined during the post-Thanksgiving Black
Friday weekend, which had long been famous for long lines and
frenzied crowds.
Consumers this year were unmoved by retailers’ aggressive
discounts and longer Thanksgiving hours, raising concern that
the industry won’t be able to pull out of a slump. The NRF had
predicted a 4.1 percent sales gain for November and December —
the best performance since 2011. Still, the group cast the
latest numbers in a positive light, saying it showed shoppers
were confident enough to skip the initial rush for discounts.
“The holiday season and the weekend are a marathon, not a
sprint,” NRF Chief Executive Officer Matthew Shay said on a
conference call. “This is going to continue to be a very
competitive season.”
The Washington-based NRF had predicted that 140.1 million
shoppers would visit retailers this weekend, a small decline
from last year’s 140.3 million. Instead, only 133.7 million
showed up — despite many stores extending their hours during
Thanksgiving to boost sales.

Cyber Monday

The slower foot traffic puts pressure on retailers to wring
more money from consumers in December, including during
tomorrow’s Cyber Monday e-commerce blitz. Holiday shopping is
key for retailers — with sales in November and December
accounting for about 19 percent of annual revenue, according to
the NRF — and more of that is shifting online.
The Web may not be a savior for traditional retail, though.
While e-commerce orders are growing, they’re still dwarfed by
brick-and-mortar sales. The novelty of Cyber Monday also is
dimming: The number of shoppers participating in the event is
projected to decline tomorrow.
So far, holiday shoppers have spent $22.7 billion online
this season, up 15 percent from a year earlier, according to
ComScore Inc. That includes more than $1.5 billion on Black
Friday.
The e-commerce growth means shopping malls have to work
harder to get people in the door. The University Town Center —
a brand-new mall in Sarasota, Florida — was only moderately
busy on Saturday evening, with more customers in the corridors
than in the stores.

Not Enticed

Ariana Bravo, a 16-year-old student from Lakewood Ranch,
said she used her employee discount at Pacific Sunwear to buy a
couple small items, but wasn’t lured by any promotions.
“It seems like they’re the normal sales that they already
have, just all in one day,” she said.
Even as an improving job market and lower gas prices have
sent consumer sentiment to its highest level since the
recession, many Americans are keeping a lid on Christmas
shopping. Another customer at the Florida mall, Jotasia Walker,
said her family draws names and gets one gift per person, rather
than buying presents for everyone. The 21-year-old, who was
visiting the mall with three sisters, two cousins, a niece and a
nephew, said they came out more to spend time together than to
shop.

Lower Average

The average shopper spent an estimated $380.95 over the
weekend, a 6.4 percent drop, according to an NRF-commissioned
survey of more than 4,600 people by Prosper Insights &
Analytics.
The industry’s focus now shifts to Cyber Monday, when e-
commerce sites release another wave of discounts. Almost 127
million Americans will shop online tomorrow, Prosper predicts,
down from 131.6 million a year earlier. That lends evidence to
the notion that Americans are less enticed by one-day sales
events.
Many consumers also don’t feel like the economy has
recovered from the recession yet, Shay said. That makes it
difficult to gauge how much they plan to spend.
“The challenge is looking for a new equilibrium, and we
just haven’t found it,” he said.
Retail chains have spruced up their websites in recent
years, though they’ve struggled to keep pace with Amazon.com
Inc. Sales at Amazon, the world’s largest online retailer,
jumped 46 percent yesterday and 24 percent on Black Friday,
according to ChannelAdvisor Corp. That exceeded total e-commerce
growth on those days, the research firm found.

Fuel Costs

Cheaper gasoline prices, meanwhile, are working in the
retail industry’s favor. The average cost of a gallon of regular
gasoline was $2.81 last week, the lowest in four years,
according to the automobile group AAA. That’s leaving more money
in shoppers’ wallets — and making it less expensive to take a
trip to the mall.
For many shoppers, though, the excitement of Black Friday
sales may have simply worn off. Consumers know they can get
discounts throughout the holiday season and are adjusting their
shopping accordingly, said Simeon Siegel, a New York-based
analyst at Nomura Holdings Inc.
“You can’t outsmart the consumer anymore,” he said. “You
need to pander to where the consumer wants to shop and when.”

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