“Sell” may be the chorus on Wall Street, but optimistic shoppers looking to fill the empty space under the country’s Christmas trees were out in full force during the season’s final shopping weekend.
With Christmas just around the corner, Americans streamed into brick-and-mortar stores on Dec. 22 and Dec. 23 in search of deals. The International Council of Shopping Centers predicted heading into the weekend that 48 percent of U.S. adults would spend over the weekend, and analysts say early signs point to a blowout.
“Best Saturday and Sunday we’ve ever seen,” said Craig Johnson, president of retailer research firm Customer Growth Partners. “Wall Street may be panicking, but consumers are not.”
Even as the S&P 500 Index continues to tumble as fear of a possible slowdown in the New Year grips the market, many U.S. consumers are still feeling merry. Higher employment and wages translate into higher household cash flow, Johnson said, meaning that credit cards didn’t do all of the heavy lifting this year.
The weather cooperated in most parts of the country and gas prices are lower than last year, so consumers had no excuses not to make those final pre-holiday shopping treks.
With the window on free, two-day shipping firmly closed for holiday deliveries, gift-givers hustled to value-focused retailers such as Walmart Inc., Costco Wholesale Corp., and Target Corp. Apparel did especially well, analysts said.
“Stores were busy,” said Jennifer Bartashus, a Bloomberg Intelligence analyst, adding that retailers were making a big dent selling into the inventory they’d built up. Retailers used private-label brands to increase their unique appeal, she added. “It makes it harder for direct price comparison.”
On a day when the S&P 500 fell 2.7 percent, retailers such as Target, Gap Inc. and Kohl’s Corp. eked out gains.
The only place where wider market concerns may have hit retailers is on the luxury side. Burt Flickinger, managing director of Strategic Resource Group, said observations suggest receipts at stores such as Tiffany & Co. slowed Dec. 23 after a decent day Dec. 22.
Customer Growth Partners’ Johnson estimated sales dropped about 10 percent from Dec. 22 to Dec. 23, which he called a relatively small dip. Traditionally, luxury outperforms in the weekend before Christmas.
“A combination of getting the weekly business wrap-ups on Saturday and then getting the news on government shutdowns” were behind the “noticeable slowdown” at the high-end shops, Flickinger said.
People are still buying entry-level and mid-price luxury goods, but the most expensive items are moving slowest, he said. “By this time last year, luxury stores were sold out.”
The overall luxury market is also facing some headwinds from lower foreign tourism and slower sales at department stores in women’s luxury apparel, Johnson said, adding that the weekend still saw good sales. A Tiffany spokesman declined to comment, noting that the company will release holiday results Jan. 18.
By Deena Shanker from Bloomberg.