With some economists drawing the holiday sales glass as half full, others depict it as half empty. Who is right? No one is certain as there are plenty of "facts" to back up each perspective.

The Boston Consulting Group says expectations for weak holiday spending may be overblown. Its survey of consumers, conducted in October, found that half of all consumers expected their holiday spending to be the same as last year. In fact, three quarters of those surveyed felt that even the troubled real estate market would not change their holiday spending. That, combined with low unemployment, favorable real income and optimism among middle class consumers portended well for the holidays. However, that was before today's report from Standard and Poor's showing the sharpest declines in housing prices since they began collecting data in 1987 and the Conference Board's report showing consumer confidence at a two-year low.

Black Friday
Spending on Black Friday, the Friday after Thanksgiving, was up 22 percent compared to 2006 according to comScore.  Overall Thanksgiving sales were up 29 percent and spending for the first 23 days of November were up 17 percent. The National Retail Federation found that sales per consumer were down, but increased traffic made up for the lower per capita spending. More than 147 million consumers went shopping, up 4.8 percent from Black Friday a year ago.

Economists at ShopperTrak RCT Corp. had expected modest sales increases of no more than 5 percent over the Friday and Saturday of the Thanksgiving weekend. It turned out their glasses weren't rosy enough, as weekend sales among the retailers they track were up 7.2 percent and Friday sales up 8.3 percent.

Cyber Monday
And what of Cyber Monday, a made up marketing effort for the first day after Thanksgiving said to be the biggest online shopping day of the year (In fact, it isn't even in the Top 10)? Traffic on cyberMonday.com, an online sales outlet, was up three times over last year.

Shop.org reported that 32 percent of consumers said they would shop online on Cyber Monday, five percent more than in 2006. And early returns indicate sales may be up by more than 15 percent according to comScore. Actual results should be available by the weekend. The media has latched onto this day as another harbinger of holiday sales. Whether the online sales increases reflect future holiday spending or if they only represent the general trend from brick and mortar sales to online sales, or expanded promotional efforts by the online sites, is uncertain.

Green Monday
Not to be outdone, the folks at eBay have designated the second Monday of December, the genuine biggest online shopping day of the year, Green Monday (green, as in cash).

So, will positive indications from the Thanksgiving weekend foretell overall holiday sales? Will online successes and holiday traffic set the tone for the season? Or will toy recalls, record high gas prices, tight credit, foreclosures, falling property and stock market values and overall consumer negativity be the Grinch that steals Christmas?  One thing for sure, there is a lack of consensus among the so-called experts.

-- Ira Silvergleit
isilvergleit@safnow.org

 

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