U.S. consumers, who flocked to malls at the start of the holiday shopping season, have since backed off, kept out of stores by a Midwest ice storm and the ease of shopping online, data released on Sunday by SpendingPulse showed.
While online shopping may be a bright spot in a gray landscape for brick-and-mortar stores, the category's growth is not as strong as it once was as low-income consumers feel the pinch, according to Internet research firm ComScore Inc..
The retail data service of MasterCard Advisors said that after a strong discount-driven start to retail's most important season, sales have slowed steadily, returning to the modest growth expected this year as consumers face a housing slump, a credit crunch, and higher costs for food and fuel.
SpendingPulse said that over the first 20 days of the holiday shopping season, from November 23 to December 12, sales at U.S. specialty apparel chains, which include Gap Inc, Aeropostale Inc and Urban Outfitters Inc, rose 0.5 percent this year, down from a 5.1 percent gain last year.
Across the board we've had a regression in growth since Black Friday to moderate levels or somewhat flat levels, said Michael McNamara, SpendingPulse's vice president of research and analysis.
Apparel sales rose 11 percent on Black Friday as shoppers took advantage of early hours and deep discounts, such as 50 percent off everything in Aeropostale stores. But their enthusiasm waned with the passing of the weekend, which clocked a final sales increase of 5.9 percent.
Sales of women's apparel, which has been lagging for some time at chains such as Chico's FAS Inc, Talbots Inc and AnnTaylor Stores Corp, fell 5.7 percent over the first part of the shopping season, SpendingPulse said.
SpendingPulse, which tracks sales in the MasterCard payments network and couples it with estimates for all other payment forms, pointed to a continuation of that sector's weakness and bad weather that kept some people home.
Overall to us it looks as though bad weather conditions across the central and northern parts of the country contributed to the bad growth rates, McNamara said, citing the impact of an early-December ice storm in the Midwest.
McNamara said apparel sales fell 0.4 percent in that part of the country, while sales rose 3.2 percent in the Northeast and 2.8 percent in the Pacific region.
McNamara also said that over the last 4 weeks, there was 1.2 percent less gasoline sold at the nation's pumps, suggesting that consumers are a bit less mobile.
That's generally a negative for retail sales when consumers are less mobile, McNamara said.
Bright spots included men's clothing, which rose 4.5 percent over the first part of the shopping season; footwear, which rose 6.3 percent, and consumer electronics, which rose 5.8 percent, McNamara said.
But McNamara said the category with the strongest growth so far has been online, with Internet retailers such as Amazon.com Inc. benefiting from a 29.8 percent increase over last year.
ONLINE BEATING STORES, BUT NOT ITSELF
But growth in online sales are much lower than they were a year ago, as consumers with lower incomes pull back.
Online spending reached $22.67 billion in the November 1 to December 14 period, up 18 percent from a year ago. But that growth rate compares with a 26 percent increase at the same time last year, ComScore said on Sunday.
The current economic realities appear to be having a negative impact on the growth in consumer spending, said comScore Chairman Gian Fulgoni in a statement. Consumers in lower-income segments appear to be the most affected, as evidenced by the sluggish growth in their rate of online spending.
ComScore said households with annual incomes greater than $100,000 spent 28 percent more so far this season, while households with less than $50,000 increased their spending by only 10 percent.
ComScore, which expects strong sales at the start of this week since many free shipping deals expire after Tuesday, is forecasting a 20 percent increase in online sales for all of November and December.
With less than two weeks until Christmas, this can be the busiest time for retailers, who see as much as 40 percent of holiday sales in the final 12 days, McNamara said.
Despite the post-Thanksgiving lull, many retailers have held off on dramatically slashing prices, betting shoppers will come in closer to Christmas. With winter storms keeping some shoppers at home earlier in the month, the home stretch will be even more important.
(Editing by Steve Orlofsky, Phil Berlowitz)