Christmas shoppers looked for discounts this holiday season but they apparently spent less this year compared to the previous years. It looked like consumers were concerned about the economy and their spirits dampened by the storms and shootings.
Confidence among consumers in the United States dropped to their lowest point in December since July due to the increasing economic worries. This is according to a monthly index released last Friday. Analysts said that the customer traffic over the weekend was at par compared to last year but they spent less this year.
It seems like there’s no Christmas spirit this year. There were too many distractions leading to the Christmas season. Shoppers were worried about the fiscal cliff as the White House and Congress fail to reach a compromise that could lead to a series of spending cuts and tax increases at the start of 2013.
The shooting at Newtown, Connecticut also dampened consumers’ spirit, which is just after the retail woes from superstorm Sandy’s devastation of the East Coast.
Retailers tried to attract consumers by slashing prices and they hope that spending increases after Christmas. Sales of electronics, jewelry, home goods, and clothing increased 0.7 percent two months before Christmas compared to last year. It was below the 3 to 4 percent growth that analysts predicted. It was also the worst year-over-year performance since 2008. In 2011, retail sales increased 4 to 5 percent during November and December.
Retailers still have time to make up for lost ground. The final week of the month accounts for around 15 percent of December’s sales. The season’s weak sales could also affect sales for 2013. Retailers would make fewer orders to restock their shelves and discounts will hurt their bottom line. Wholesalers will buy less goods and orders to factories will drop in the next couple of months.