Holiday Retail Sales: Ho Ho Hum or Ho-Ho-Ho? National retail results are in and, according to the International Council of Shopping Centers (ICSC), when all was bought and wrapped, year-over-year sales increased by 4.5 percent in December and 3.1 percent for the overall holiday season. While that’s pretty much on target with projections, it was the pace of sales that made this year a bit different.
Some speculate that the reason for this is that, early on, we couldn’t see the fiscal cliff for the Christmas trees, so the shopping season got off to a bang. Then we suddenly realized those weren’t sugarplums dancing in our heads. Instead, they were Democrats and Republicans doing the do-si-do as the cliff was coming into full view. That was enough to give us pause at the cash register, and the retailers lost a bit of momentum. However, with a favorable holiday calendar adding two extra shopping days before Christmas and heavy after-Christmas shopping, sales exceeded 2012. Big winners, however, were online retailers and, correspondingly, our hometown mega-shipper, FedEx. With online sales exceeding $30 billion – an increase of as much as 16 percent over last year – and many online retailers offering free shipping, it’s no wonder that FedEx set several shipping records during the holidays. In fact, FedEx Ground team members in the New York area rang the bell at the New York Stock Exchange on Dec. 17, the official “Free Shipping Day” of the season.
As is typical, how specific retailers fare during the holiday season – when many expect to ring up at least 40 percent of their annual sales – depends on a number of factors, including weather and what items are particularly “hot,” e.g., electronics, popular toys, etc. The giving of gift cards continues to grow in popularity, with 2012 sales projected to exceed $110 billion, a 10 percent increase over 2011.
So let’s get a little closer to home to see what was happening in our own market. Paul Kaurez, general manager for Oak Hall and Vineyard Vines in the Regalia Shopping Center, has a slightly different view about the cause of the temporary shopping lull that occurred. Paul says they expected a lull, given the way the holiday shopping calendar for 2012 laid out as compared to 2011.
“With Christmas falling on a Tuesday instead of Sunday this year, and Thanksgiving falling early, we had a longer shopping season. So we expected there to be a lull after Thanksgiving weekend and that was the case. But shoppers came back really strong the weekend before Christmas, along with the additional two days we had this year, Sunday and Christmas Eve. We actually exceeded our sales expectations in both stores. It was a good year.”
In keeping with national trends, Paul says Oak Hall and Vineyard Vines had very strong sales in gift certificates, particularly as last-minute gifts. “It’s the gift that always fits,” he says.
As we head into a new year for retail real estate in the Memphis metro, we believe consumer confidence is on the rise and that we’ll see positive momentum in 2013.
Ed Thomas is vice president of retail services for Colliers International | Memphis.