PURCHASE, N.Y. – Holiday-season sales of luxury items fell more than a third compared with a year ago, while total retail sales fell 5.5 to 8 percent, according to SpendingPulse data released today by MasterCard Advisors.
“A difficult economic environment – combined with unfavorable weather during the last week of shopping – made 2008 one of the most challenging holiday shopping seasons in decades,” Michael McNamara, vice president of research and analysis for SpendingPulse, wrote in the SpendingPulse 2008 Holiday Wrap-Up Report for the Nov. 1 through Dec. 24 shopping season.
Core retail sales excluding automobiles and gasoline fell 2 to 4 percent compared with a year ago, while e-commerce sales fell 2.3 percent.
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Clothing sales were down about 19 to 21 percent, the report showed. Holiday-season sales of women’s apparel fell 22 to 23 percent, men’s clothing sales fell about 14.3 percent and footwear sales fell 13.5 percent.
Electronics and appliance sales fell more than 26 percent. “Sales above $1,000 have been a consistent drag on this sector throughout the season,” McNamara said.
And luxury items posted the largest year-over-year decline, with holiday sales that fell more than 34 percent. Excluding jewelry, however, luxury sales fell just over 21 percent, SpendingPulse found.
The declines are the worst since MasterCard Advisors launched its SpendingPulse reports in 2002, McNamara told Bloomberg News.
The data was in line with earlier estimates, such as the International Council of Shopping Centers’ warning this Tuesday that November and December sales at stores open at least a year fell as much as 2 percent. That would be their sharpest decline since at least 1969, the ICSC noted.
“It’s been difficult, much more difficult than anyone expected,” Gilbert Harrison, chairman and CEO of retail advisory firm Financo Inc., told Bloomberg Television today in an interview from West Palm Beach, Fla. The global credit crisis, the recession and the nation’s highest unemployment rate in 15 years all have acted to dampen spending. Consumers “will spend on necessities, they’ll spend on what they need, but they’re being very particular,” Harrison said.
The MasterCard Advisors SpendingPulse is an economic index that tracks consumer spending in a variety of categories based on data from sales processed by MasterCard Inc. Estimates are adjusted to allow for transactions featuring other payment methods, including cash, checks and other companies’ debit and credit cards. Additional information is available at .
