Weak holiday shopping season leaves retailers reeling
The new year could be met with a wave of store closings after sales fell 8% in December through Christmas Eve, according to one analysis.
After a dismal holiday shopping season, struggling retailers face what could be a very unhappy New Year.
Holiday sales figures have started to trickle in and, as expected, most retailers suffered mightily even as they slashed prices and offered deals to lure wary consumers.
In the new year, analysts are expecting a wave of store closings as retailers race to shut down redundant or underperforming locations. Weaker players will be forced to file for bankruptcy protection and some will exit the market altogether.
"Overall, it was a very weak holiday season and it's going to flow over to the first half of next year," said Jeff Mintz, an analyst with Wedbush Morgan Securities. "Those that survive will be in a better position because the competition will be reduced, but for right now it's a very difficult time to be a retailer."
Retail sales fell 5.5% in November and 8% in December through Christmas Eve compared with a year earlier, according to data tracker SpendingPulse, a unit of MasterCard Advisors.
Many categories, including footwear, apparel and electronics registered double-digit declines from Nov. 1 through Dec. 24. Luxury goods did especially poorly, with sales falling 34% over the same period last year.
Amid concerns about a huge post-Christmas fallout, retailers still have to fight for customers: In recent years, January has gone from being a clearance month to a revenue-generator month, led by gift card redemption and shoppers picking up items for themselves rather than to give as gifts, said Marshal Cohen, chief industry analyst at NPD Group.
andrea.chang@latimes.com
