Unemployment is about status quo in San Diego.* The European economy is shaky. The upcoming presidential campaign has people on edge. Yet consumer spending was expected to increase throughout the holiday season.
Why? Because after a long-standing shaky economy, consumers got tired of pinching pennies and wanted to “live it up a little”.
Interesting to note, it was the chains where people shop to pinch pennies that had the hardest time this holiday season. The WalMarts, Targets and K-Marts of the world had been competing with cheaper stores such as, Family Dollar Tree during this past year, so everyone was aboard the discounting merry-go-round battle to hold on to diminishing market shares.
Surprisingly, it was the luxury retailer that reigned this holiday season. Although they appeal to 1% of the population, that segment didn’t look for deals, therefore the luxury retailer held their profit margins without being squeezed. Where the discounters may have garnered volume, their margins were reduced so much that the result was akin to tredding water.
Overall, holiday retail sales projections that were made were based on a lower high, due to the last four years of recessionary spending. So percentage increases are based on lower figures, which are starting to be deemed “the new normal”.
The actual sales figures that are coming in are very good. Thumbs up.
According to ShopperTrak, the warm weather, deep discounts and Christmas Eve falling on a Saturday got shoppers out buying this holiday season. Sales in the week ending December 24 increased by a whopping 14.8 percent from 2010, which equates to about $44 billion. The warm weather, however, effected the smaller, alternative clothing chains that sell seasonal clothing.
December 26 sales, which was a public holiday this year, shot up 25.5 percent to $7.1 billion. (Source: ShopperTrak, shopping mall traffic monitor)
The rise of economy
The retail data points made on Wednesday by Reuters.com coincide with recent data that shows the U.S. economy as in recovery mode. Consumer confidence also rose in December, according to Conference Board numbers, keeping in mind that San Diego’s indicators are showing the county to be a little behind the national average.
All-in-all, it was a commendable holiday season for retailers. With another shaky year under our belts, it feels like small businesses and chains alike are ready for anything.
* Note: Unemployment is down by .4%, according to Sandiego.com, however the statistics were not adjusted seasonally.