Two surveys looking at retail sales showed dismal results for the week ending Dec. 27. Sales are down compared to last year and last week, producing to weakest holiday spending period is nearly four decades.
The ICSC-Goldman Sachs survey, which examines 75 retail chain stores in the U.S., excluding restaurants and vehicle demand, reported that sales were down 1.8% compared to last year. Hopes for a surge of last-minute shoppers also appear to have been false, as sales were down 1.5% compared to the previous week.
"The 2008 recession, widespread heavy discounting and adverse pre-holiday weather all coalesced to produce the weakest holiday season since at least 1970," said ICSC chief economist Michael Niemira, who projects December sales to fall by at least 1%.
"Although there is another week in the fiscal month, December's sales are unlikely to get much help from the post-Christmas shopping," he added.
Meanwhile, the Johnson Redbook retail survey, which covers 9,000 retail units, recorded a 0.4% decline in the week compared to the same period last year. In addition, sales to date in December fell back 0.5% compared to November.
The two reports confirm expectations that the fourth quarter will show yet another broad contraction in U.S. consumption, which accounts for more than two-thirds of GDP.
By Patrick McGee and edited by Stephen Huebl
©CEP News Ltd. 2008