Retailers
had high hopes on holiday season having lived through perhaps the most
depressing period since Great Depression. All were agreed that sales will pick
up, but how much, nobody knew. The Stitch Times has collected and
collated the information on the prominent world markets like the US, the EU, Japan and China as how the retail sales moved. While there are signs of worldwide
economic recovery, as year-end sales increased slightly in the United States and the United Kingdom and surged on the Chinese mainland, moderate declines, however,
were recorded in other major markets, including Germany, Italy, France and Japan. Here are the initial findings:
United States
The US posted a marginal sales increase over
last season's worst performance in decades. Sales began slowly after
Thanksgiving and remained sluggish through December despite increasingly
intensive retail promotions and one additional shopping day over last year.
Sales were further hampered by a severe snowstorm across large portions of the
country. Despite improved consumer sentiment, shoppers continue to trade down,
with luxury and big-ticket items selling poorly and practical, smaller ticket
items sought after. Retailers are posting higher profit margins by reducing
inventories to avoid the heavy markdowns seen last season. Promotional
activity, especially early in the season, was less rigorous and discounts were
less extensive. More retailers introduced layaway programmes to reserve
merchandise for customers until they completed installment payments. The
quickie retail operations known as "pop-up" are visible throughout Southern California and around the nation, filling in the gaps at recession battered
shopping centres for a fraction of the rent. Mass merchandisers and discounters
were favoured, though department stores and luxury stores fared slightly better
than last year. Many online retailers posted double-digit sales gains as
value-conscious consumers were drawn to convenient price comparison, extensive
promotions and free delivery offers. Leading retailers launched an innovative
sales drive by targeting smart phone users. Gift cards became more popular as
must-have gift items ran out of stock, but Christmas sales results are
effectively reduced since revenue is not counted until the cards are redeemed.
Clothing, footwear and basic commodities offering comfort and function were
well received, while high-fashion items such as upscale timepieces and
jewellery were in the doldrums.
European Union
Festive spending in the EU remained cautious
but less gloomy than last season. Christmas shoppers appeared more willing to
spend, but continued to trade down and stick to budgets as they hunted for
basic and practical products as well as second-hand items. A strong euro
enticed many continental buyers to shop abroad. Cold weather did not
substantially affect Christmas shopping, since it only delayed year-end
purchases and boosted sales of winter clothes and related merchandise. Most EU
retailers continued to rely on discounts and promotions to attract struggling
shoppers, but offers were less prevalent than last season as retailers trimmed
their inventories. Hypermarkets continued to attract more customers than
department stores and luxury stores. Online retailers offering convenient price
comparison, wider availability of products and better delivery options were
another winner this season. More brick-and-mortar retailers turned to online as
well as pop-up stores to bolster sales. Germany's Christmas sales
were estimated to have declined slightly from last season, as consumer
confidence there remained weak. Italy benefited from reviving global
demand, but overall consumer sentiment remained flat, as shoppers mostly
snapped up consumer electronics and toys. Flat-panel TVs, mobile phones,
notebooks, video games and some basic toys were popular with Italian shoppers. French
consumer confidence remained cautious despite higher festive spirits. UK Christmas sales were boosted by a last-minute surge to post a slight rise from
last season's worst showing in 30 years. Part of the increase was driven by
advance purchases to avoid a January 2010 VAT increase from 15 per cent to 17.5
percent. A weak British pound also drew continental bargain hunters, allowing
moderate sales growth for most items.