Holiday Sales Sluggish, Hopes Hang on Post-Christmas Traffic

It’s the Sunday after Christmas, and some are not sharing in the holiday cheer. However if Michael Niemira is right, the coming week will make it up for brick and mortar retailers who have not seen the growth the industry was counting on. Meanwhile, online sales have boomed.

Niemira, chief economist at the International Council of Shopping Centers (ICSC), says the trend of the 2004 season is “last-minute and later”. He is forecasting 2.5-3 percent growth this season, while the National Retail Federation is projecting sales growth of 4.5 percent.

With 12 million American shoppers only starting their holiday gift buying last week, ‘last-minute’ just might be the hottest trend of the holiday.

To bring them in, U.S. retailer Macy's cut prices by up to 75 percent on some items in a final pre-Christmas push while other retailers are expected to drop prices sharply today (Sunday).

But tardiness is not a trend that popped out of nowhere. Sluggish job growth and harsh weather conditions may have played a central role this season.

And the result has been felt in stores. Wal-Mart is projecting December same-store sales to slow to a 1-3 percent increase over last year and is cutting prices.

Luxury retailers, however, are doing better, thanks to high income buyers with more to spare than the average shopper. Neiman Marcus reported earlier this month that same-store sales rose 8.4 percent last month, beating the 1.8 percent increase at 73 chain retail stores tracked by ICSC.

Gift cards, a common item this year, are likely to send many to stores today and in the coming week.

Another hot attraction this season was not a gift item but rather a destination. Internet retailers have a very big smile on their faces this holiday.

Online research firm ComScore Networks Inc expects online retail spending to exceed $15 billion during the holiday shopping season, increasing 23 percent to 26 percent. Total online retail spending during the fourth quarter is expected to cross the $20 billion threshold for the first time ever.

So if you are looking for recommendations for gift card recipients walking into your store, or need to make a recommendation to someone who has not yet completed holiday shopping yet, these are the must have jewelry items of this season, according to ICSC:

• Chandelier and drop/linear earrings
• Pink sapphire/topaz/tourmaline and diamond
• White gold
• Fashion Jewelry
• Watches – with Art Deco dials; diamond-decked watches; oversized watches with big straps; chronograph watches; funky watch face shapes