Signs of the Season
Retail sales in November were up 1.2 percent in November, according to the Commerce Department, double analysts’ estimates. The National Retail Federation says that November sales were up 5.1 percent, ahead of the NRF projected increase of 4 percent for the overall holiday season. Online shopping continues to grow dramatically: it’s up 18 percent so far. Other bright spots so are luxury, up 10.8 percent, and electronics, up 5.8 percent.
But, as you’ve no doubt heard, there are also many negative economic indicators for the holiday season. Spending on women’s apparel dropped nearly 6 percent during the first half of the Christmas season, compared with the same period last year, according to MasterCard Advisors, a division of the credit card company.
How is jewelry doing so far? According to Phil Rist of BIGresearch, 22.2 percent of consumers plan to buy jewelry this holiday season, down from 26.4 percent in 2006. There are rumors that sales at Sterling are down 7 percent so far this holiday season. The major has responded by cancelling orders around the globe, suppliers say. I can’t confirm these rumors, though: Sterling is scrupulous about never discussing sales ahead of corporate reports. A study of 2,104 people conducted by the Jewelry Consumer Opinion Council, a division of MVI Marketing Ltd., in the last week of November 2007 showed Black Friday and the Thanksgiving weekend shopping season was down by as much as 4 percent. Only 16 percent of those surveyed purchased fine jewelry or watches as a gift over the Thanksgiving weekend, down from 20 percent in a similar study conducted in 2006. Some individual high-end retailers are doing well, however. I’ve heard reports of trunk shows with customers lining up to buy.
But remember, sales of gift cards are surging and they are not counted in holiday purchases until they are spent. According to Rist, 56 percent of consumers intend to spend $26 billion in gift cards this shopping season. When added to the expected increase of 4 percent overall, the retail numbers may not be as bad as media reports would have you believe.