Retail Roundup: Analyzing Christmas Sales & Traffic Trends

Christmas shopping New York
Christmas shopping in New York.
Getty Images.

And so it continues: more online shopping and less in-store traffic.

Robust e-commerce growth, one report said, plus a surge in spending on women’s apparel led to improved retail sales during the holiday season.

According to MasterCard Advisors SpendingPulse, which looks at U.S. retail sales trends across cards, cash and checks, retail sales grew 7.9 percent during the traditional Black Friday-to-Christmas Eve shopping season (excluding auto and gas).

The same could not be said for in-store traffic. In the fourth week of December, traffic was down 9.01 percent year-over-year, while month-to-date traffic decelerated 9.9 percent, the worst monthly traffic in 2015, according to Cowen & Co.’s retail team.

We continue to believe retailers are struggling with excess inventory, especially apparel, and expect the environment to remain highly promotional through January,” Cowen & Co.’s team wrote.

While he observed heavy discounting, Nomura Securities International Inc. analyst Robert Drbul said he saw “solid” traffic in the stores his team visited in Connecticut, Massachusetts and New York over the weekend.

Traffic, while choppy, was generally solid. We observed the heaviest trends at Macy’s, JCPenney, Nordstrom and Ugg,” wrote Drbul. “Given the traffic trends we have seen this season, we would surmise that Saturday, Dec. 26, amounted to one of the busiest shopping days of the year – roughly on par with Black Friday and Super Saturday.”

While women’s apparel seemed to bounce back during the holiday season, with double-digit growth, men’s apparel lagged “well behind,” according to the MasterCard Advisors report.

Pent-up demand from a delayed start to winter, the report said, may be the reason overall apparel saw high-single-digit growth during period.

Amid concerns about the impact of unseasonable weather and inventory overages on profit margins, online shopping has become the retail sector’s savior in recent months.

During Thanksgiving and Black Friday weekend, consumers also gravitated away from malls and stores and flocked to the Web to do their shopping.

Ahead of the holiday season, The NPD Group had forecast that 67 percent of consumers would do some of their holiday shopping online this year. A survey by Deloitte also found that 82 percent of shoppers planned to do research online before making a purchase this holiday season.

Shoppers are becoming increasingly comfortable making the transition from conducting research online to making a purchase through the channel, experts say.

Still, holiday sales and promotions remained heavy — even unprecedented — during the weekend, analysts suggested.

As expected, promotional activity this weekend was the widest and deepest seen so far,” Drbul said. “This was likely driven in large part by heightened inventory across retail, which in our view remains an issue. With deals in mind, shoppers came out in force to return or exchange items, spend gift cards and stock up for next year.”