US retail store traffic fell last week as steeper discounts failed to lure shoppers before and after Christmas, prompting a research firm to lower its forecasts and predict the worst holiday-shopping season it has seen.
Holiday sales probably decreased 2.3 per cent and traffic dropped 16 per cent during November and December, ShopperTrak RCT Corp estimated on Thursday. Those figures would be the worst since the research firm started tracking the data in 2003.
Many consumers retrenched and those that sought out last- minute holiday gifts looked for the steepest bargains. A US recession, consumer confidence that plunged to a 41-year low and the highest unemployment rate in 15 years deterred shoppers even as retailers including Macy’s Inc. and AnnTaylor Stores Corp marked down items by 60 per cent or more.
Traffic fell 4.9 per cent in the week ended December 27 from a year earlier, Chicago-based ShopperTrak said in a statement.
Some consumers did their holiday shopping earlier this year and others waited to take advantage of post-Christmas discounts, Hana Ben-Shabat, a partner at consultant AT Kearney’s retailing practice, said today in a telephone interview. “The first six months of 2009 are going to be really difficult,” she said.
Retail sales rose 21 per cent last week from a year earlier, helped by a calendar shift that increased the number of weekdays before Christmas, according to ShopperTrak.
ShopperTrak had predicted sales would increase 0.1 per cent and customer traffic would slide 9.9 per cent during November and December. The research firm uses a sampling of more than 50,000 stores in shopping centres and malls that measures the number of customers that enter the locations.
“A rapidly declining economy, almost the smallest period of days between Thanksgiving and Christmas, terrible weather patterns and very aggressive discounting by retailers all combined to create one of the worst holiday seasons in recent memory,” Eric Beder, an analyst at Brean Murray Carret & Co in New York, wrote in a research note on wednesday.
He reduced fourth-quarter and 2009 earnings estimates for retailers including J Crew Group Inc, Coldwater Creek Inc and Aeropostale Inc.
