Economic update: Super Saturday clipped by winter, retailers hoped for final surge

Super Saturday — the final Saturday before Christmas — is typically one of the top revenue days of the year for retailers, but thanks to an untimely winter wallop on the East Coast, sales reports from the weekend appear to be mixed.

It is important to point out, as Planalytics did in its most recent shopping impact weather report, while there was snow during Super Saturday in 2008, it is not just that it snowed, but where it snows that is important. In this case, Planalytics is estimating that $2 billion in retail sales was lost simply because the weather impact this year was centered on heavily populated shopping regions. With the Northeast typically accounting for up to one-third of all Super Saturday sales on average, the snowstorm — which shut down airports and freeways, and caused many stand-alone stores and even malls to close early — will have a cumulative impact. One report stated that across the country, mall traffic was down 10 percent.

What retailers will be hoping for, according to numerous economic and retail analysts, is that consumers who were unable or unwilling to shop over the weekend because of the weather will head to stores through Christmas Eve (this Thursday) and make up some of the shortfall from lost Super Saturday revenue.

In looking for a bright spot amid the cloud of stormy reports, there is a general consensus that profits will climb on increasing margins. Reports from most retail analysts that SNEWS® has previewed still expect retail sales to be flat to slightly down this holiday. Due to lower inventories, there has been far less marking down and slashing of prices to dump overstocks.

Another bright spot is that initial reports show online sales were up 14 percent on Super Saturday as folks who were eager to shop simply went online if they could not go to a store. According to Akamai Retail Net Usage Index, retail website traffic peaked at 2.9 million visitors per minute Saturday night, up from 1.9 million in 2008. Overall, however, online sales make up only 5 percent of total retail industry sales, according to the National Retail Federation — so while the news is good, an increase in online activity does not translate into a full save of lost in-store sales.

So what does all this mean for holiday sales as we head into the final days? As is our custom, we’ve assembled a few facts and figures to help guide any decisions you might need to make on behalf of your business in the coming days and weeks:

>> According to Planalytics, retailers with must-have items for Christmas gifts, as well as destination stores consumers visit for needed supplies, will enjoy the most recovery from lost Super Saturday sales.

>> News reports indicate that larger retailers are already responding to the impact of Super Saturday by adding additional shopping hours. They are opening earlier and closing later in major metropolitan areas.

>> If you’re a Consumer Reports Retail Index subscriber, you were buoyed by the Dec. 14 news that the Past 30-Day Retail Index (purchases made in November) rose 24 percent, climbing to 11.2 from 9.0 in October. The outlook for planned purchases in December was at 12.2, up from 9.0 the prior month — an increase of 36 percent. The major gains in retail spending are led by personal electronics, major electronics and small appliance purchasing. However, you were likely less enthused by the consumer sentiment scores, which the report described as indicating a “reluctant rally.” According to Consumer Reports, consumer sentiment remains low and relatively steady over the past three months. It stands at 41.8 in December, down slightly from 42.2 in November.

The low but stable consumer sentiment numbers are tied to the Consumer Reports Trouble Tracker Index, which has stalled at 62.0. This measure of financial difficulties had been on the decline since September. But in December, the decline was halted with 37.2 percent of Americans reporting one or more financial difficulties up from 35.6 percent in November. This increase can be tied to the 15.7 percent of Americans that were unable to afford medical bills or medications in the past 30 days, up from 13.7 the prior month.

The Consumer Reports Employment Index was at 48.9 in early December and remains unchanged from November’s 49.0. This is reflective of a market that is still shedding jobs. During November, 7.4 percent reported losing their job, while only 5.2 percent of Americans started a new job.

Consumer Reports is predicting that while growth has returned to the Retail Index, it is possible that the index will report a sharp decline below pre-holiday levels as consumers recover from their holiday shopping splurge and face increased debt.

Regionally the economic picture is mixed with a worsening situation in the Midwest led by a decline in the Consumer Reports Sentiment Index and increase in stress levels. Overall, the situation is unchanged in the Northeast, South and West.

>> ComScore reported on Dec. 13 that holiday season retail e-commerce spending for the first 41 days of the November / December 2009 holiday season has rung up $19.9 billion, a 3-percent increase from the same timeframe in 2008. Since ComScore began tracking e-commerce spending in 2001, it has reported 13 individual spending days eclipsing $800 million, each of which has occurred during the past three holiday seasons. Green Tuesday (which occurred after the ComScore Dec. 13 news release) rang up $913 million in sales, setting a record for individual spending online. The next two heaviest online spending days on record were Wednesday, Dec. 9, 2008, at $887 million and Monday, Nov. 30, 2009 (Cyber Monday), also at $887 million. Tuesday, Dec. 1, 2009, was on a par with those totals with $886 million in spending. Of the top 10 spending days on record, five have occurred in 2009, four in 2008, and one in 2007.

>> For those retailers looking forward to the four final shopping days of Christmas, the Dec. 16 report from the National Retail Federation certainly provided a feeling of hope and joy. According to its 2009 Holiday Consumer Intentions and Actions Survey, conducted by BIGresearch, the average person had completed 46.7 percent of their holiday shopping by the second week of December, less than the 47.1 percent completed by this time last year. This is the lowest percentage since 2004, when the average person had completed 46.3 percent of their shopping by the same period. According to the survey, only 11.9 percent of shoppers say they will buy their last gift on Dec. 24. Instead, the majority (35 percent) planned to finish their list by Saturday, Dec. 19. Of course, who knows how many of that 35 percent actually got out to shop on Saturday due to the weather, so one can only hope the stores will be filled through Thursday.

>> The Canadian recovery appears to be outstripping its U.S. friends to the south. According to Statistics Canada, Canada’s national statistical agency which operates in a similar fashion to the U.S. Census Bureau, retail sales in current Canadian dollars rose 0.8 percent in October to CDN $35.3 billion, the eighth gain in 10 months. Excluding the automotive sector, sales edged down 0.2 percent. In volume terms, retail sales increased 0.6 percent in October. According to a Statistics Canada news release, “The volume of retail sales has returned to a level last observed before the sharp declines in the last two months of 2008.”

>> On Dec. 21, Leisure Trends reported that because of hot and dry weather across the United States in November, overall sales in snowsports plummeted 9.9 percent compared to November 2008, while outdoor stores managed a modest 1.5 percent sales lift compared to 2008. Outdoor chain stores garnered the most increases, with a 15 percent increase in sales over November 2008. Internet outdoor store sales were up 18 percent compared to November 2008. Outdoor specialty stores, however, experienced a drop in sales, down a whopping 9 percent in November 2009 compared to 2008, according to Leisure Trends numbers. The news release from Leisure Trends does state that the percentages are preliminary and may change.

–Michael Hodgson