Jan 14, 2009

Holiday Sales Decline 2.8 Percent in 2008, According to NRF

New York City, NY – A deep recession, severe winter weather and five fewer shopping days combined to create the most challenging sales environment in years for the nation’s retailers. According to the National Retail Federation, retail industry sales for December (which exclude automobiles, gas stations, and restaurants) declined 2.2 percent unadjusted over last year and decreased 1.4 percent seasonally adjusted from November.

November sales were revised down to a 3.4 percent decline unadjusted year-over-year from the original reported 2.2 percent

As a result, initial 2008 holiday sales, which combine November and December sales, declined 2.8 percent to $447.5 billion, weaker than NRF’s projected 2.2 percent holiday forecast. Holiday sales in 2007 were $460.2 billion. This represents first decline in holiday sales since NRF started forecasting and tracking the numbers in 1995.

“The current economic crisis proved to be more challenging than any had anticipated,” said NRF Chief Economist Rosalind Wells. “Consumers showed they were more than willing to wait out retailers this year causing increased pressure on prices.”

December retail sales released today by the U.S. Commerce Department show total retail sales (which include non-general merchandise categories such as autos, gasoline stations and restaurants) decreased 2.7 percent seasonally adjusted from last month and dropped 7.9 percent unadjusted year-over-year.

There were very few seasonal bright spots in December. Among them were health and personal care stores, where unadjusted sales grew a solid 7.6 percent year-over-year and 0.4 percent seasonally adjusted from November. Sporting goods, hobby, book and music stores were up 0.7 percent unadjusted from a year ago and down 0.4 percent from seasonally adjusted month-to-month.

Weakness was seen by clothing and clothing accessories stores (down 9.4% seasonally adjusted year-over-year and 2.5% month-to-month seasonally unadjusted), furniture and home furnishings stores (down 11.9% seasonally adjusted year-over-year and 1.8% month-to-month seasonally unadjusted) and electronics and appliance stores (down 3.2% seasonally adjusted year-over-year and 1.0% month-to-month seasonally unadjusted).

The National Retail Federation is the world’s largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, chain restaurants, drug stores and grocery stores as well as the industry’s key trading partners of retail goods and services. NRF represents an industry with more than 1.6 million U.S. retail establishments, more than 24 million employees – about one in five American workers – and 2007 sales of $4.5 trillion. As the industry umbrella group, NRF also represents more than 100 state, national and international retail associations.