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US holiday season retail sales plunge amid recession
2008-12-26
WASHINGTON (AFP) - A dismal Christmas-New Year shopping season for American retailers -- that's what a preliminary poll showed Friday as the United States reeled from a prolonged recession that has cut jobs and spending. Total retail sales dropped by up to eight percent for the traditional November-December shopping period, making it one of the worst holiday shopping periods in decades, the MasterCard Inc.'s SpendingPulse unit said in a report. "While total retail sales are down in the 5.5 to eight percent range for November and December, there were a few signs of relative strength," according to Michael McNamara, Vice President of Research and Analysis for SpendingPulse. The 40 percent drop in the price of gasoline compared to December 2007 accounted for almost half of the decline, the report said, tracking retail and service sales nationally. Excluding gasoline, total sales were down two to four percent this holiday season compared to the same period in 2007, it said. Sectors that sold food, such as grocery and general merchandise stores and some sectors of the restaurant sector, helped keep total declines in the single digit range. And sales through the Internet also remained comparatively healthy, with overall e-commerce sales declining only 2.3 percent compared to the 2007 holiday season. Still, McNamara noted, "A difficult economic environment combined with unfavorable weather during the last week of shopping made 2008 one of the most challenging holiday shopping seasons in decades." The usually hot apparel sector was among the worst hit despite huge discounts. Total apparel sales declines stabilized in the 19 to 21 percent range over the same period last year, only slightly higher than the 19.5 percent year-to-year decline through the first week in December, and the 19 percent decline in the first half of November, the latest survey said. The popular electronics and appliance category also suffered, facing declines of more than 26 percent against 2007. "Sales above 1,000 dollars have been a consistent drag on this sector throughout the season," observed McNamara. But luxury sales, another high-ticket sector, showed the largest year-over-year declines, with sales down by more than 34 percent over last year. When jewelry was excluded, luxury sales were down slightly over 21 percent compared with 2007.
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