2012 Holiday Sales Register Mixed Results

Navigator Edition: January/February 2013
By: Cara Weikel

Holiday sales for U.S. retailers were mixed at best.  Well before formal results were released, there was cause for concern given the lingering effects of Hurricane Sandy, unfavorable weather patterns, non-stop coverage of the “fiscal cliff,” and so on.  Retail stocks tumbled on December 26 when MasterCard Advisors’ SpendingPulse report indicated a dismal 0.7% increase in holiday sales compared to 2011, the worst performance since 2008.

Holiday sales results, listed in Figure 1, confirm the uneven sales performance that was signaled in the weeks leading up to the year’s end.  As expected, several retailers indicated that sales were influenced by consumer caution and an uncertain economic environment.  A number of retailers also pointed to the after-effects of Hurricane Sandy as the culprit for their soft sales performance, particularly during November.  Additionally, retailers that shared results on a regional basis consistently cited the Northeast and/or Mid-Atlantic regions as having weak same-store holiday sales compared to 2011.

On January 15, the Commerce Department published sales estimates for December 2012, indicating that core retail sales, a category that excludes automobiles, gasoline and building material sales, rose 4.4% relative to the same period a year earlier.  The auto sector also improved, exceeding December 2011 sales by 7.6%.  According to other estimates, e-commerce was particularly strong during the 2012 holiday season; comScore and Chase’s HolidayPulse estimate that holiday sales in 2012 exceeded those in 2011 by 14% and 15.2%, respectively.  Several retailers described particularly solid e-commerce sales in December 2012 relative to the same period in 2011:

  • Amazon’s unit sales by U.S.-based merchants increased by 40%
  • Kohl’s e-commerce sales grew by 46%
  • Macy’s online sales rose by 52%

In the coming weeks, we will see the margins associated with 2012 holiday sales, as retailers were keen to liquidate inventory and consumers were hunting for bargains.  Initial commentary from retailers suggests that margin outcomes will vary.  In its December sales release, Kohl’s lowered earnings guidance and indicated that heavy discounting was used to move merchandise.   Margin pressure increased for Family Dollar too, driven by growth in lower-margin consumables.  Other retailers signaled that margins would hold steady or improve over 2011.  Target, whose sales were flat relative to 2011, indicated that margins were up due to pricing discipline.  Limited Brands also indicated that overall margins were up relative to 2011, but lower than company targets.  Ross Stores, which recorded 6% comparable store sales growth in December, increased its earnings projections thanks to better-than-expected margins.  In any case, there are plenty of mixed messages in the market and 2012 sales reflect the same.

Figure 1: 2012 Holiday Retail Sales Results

U.S. sales after adjustments for currency fluctuations. 2 U.S. sales. N/R = not reported.
Source: Retailer press releases.

For more information, please contact Cara Weikel, Consultant specializing in Credit Card Issuing,

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