Post-Christmas Shopping Put Some Cheer in Retailers' Holiday

Before you go, we thought you'd like these...
Before you go close icon
It looks like gift cards saved Christmas after all. Retail figures for the last week of December show a bump in post-holiday sales that may have put the shopping season over the top. But analysts are waiting for the next employment report before they declare retail to be out of the woods.Numbers released by the International Council of Shopping Centers for the week ended January 2 found that sales rose 1.5% above the last week of holiday shopping, and 2.5% above the same period a year earlier. That was the strongest week-over-week growth since last June, the ICSC's report noted.

%%DynaPub-Enhancement class="enhancement contentType-HTML Content fragmentId-1 payloadId-61603 alignment-right size-small"%% "Sales were boosted by consumers redeeming their gift cards," ICSC chief economist Michael Niemira wrote. "A chill was certainly in the air during the past week, but consumers seemingly used that as an opportunity to head for the warmth of a shopping center."

Slower sales of gift cards this year, after several years of steady growth, had been a troubling indicator as the holiday season wound down. But Niemira anticipates the full December tally will come in 2.5% ahead of last year's numbers, slightly higher than his previous 2% forecast. In his report, he reaffirmed his earlier forecast of a 1% gain for the full season, a modest result compared to last year's 5.6% drop in sales. ICSC plans to release the combined November-December sales figures Thursday.

Caution for the Spring

Most retailers will close the book on the holiday season Thursday, when they release their December sales figures. A preview by Thompson Reuters estimated that December comparable sales -- at stores open at least a year -- should rise 1.3% above last year. But it noted that most Wall Street analysts are being cautious about prospects for spring. "Things are better, but they're still not healthy yet," Jharonne Martis, director of consumer research for Thomson Reuters, told the wire service.

Investors will be looking closely at retail by week's end, because the U.S. is expected to release its employment report Friday, which some observers expect to show a slowing of job losses. The double-digit unemployment rate has been the biggest business variable beyond retailers' control.

Analysts are concerned that stores that saw steady improvement this year, thanks to cost cutting and tight inventory controls, could start trending down again as they hit the anniversary of that belt-tightening. They fear that, lacking an increase in consumer spending, merchants will run out of places to cut costs and profits will slide again. A dip in unemployment would be a welcome indicator for investors in retail stocks.
Read Full Story

Sign up for Breaking News by AOL to get the latest breaking news alerts and updates delivered straight to your inbox.

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners