Retail spending at the "bricks-and-mortar" level has not been growing really fast for several years. E-commerce, often an easier way to shop and compare prices, has had double-digit growth since Amazon (NASDAQ: AMZN) became a retail force and big store chains like Wal-Mart (NYSE: WMT) moved online.
Everyone knows that e-commerce growth faltered in November and early December. There was hope that a last minute rush from people who wanted this holiday to be a "last hurrah" would save e-commerce spending from being a total bust. Things have not turned out that way, which says a great deal about how bad this holiday season really is, at least on the retail side of things.
According to comScore, online sales were only up 1% from early December through December 19, hitting $12.849 billion. Sales on "Cyber-Monday" were hardly impressive at $846 million. Two sales days this year have topped that. The categories which have really be slaughtered are music, movies, and video and jewelry and watches. The first category does not make much sense, since songs and movies are not terribly expensive. Perhaps they tend to be bought by younger people who may be more financially pinched than their parents.
The trend of flat e-commerce sales opens the door to the issue of whether online sales can ever get back the kind of lead in growth that have gained over retail spending in stores. It may be that the regular retailer has had to drop prices so low that he becomes the financially attractive place to shop. If they can fire enough people and still operate, they may continue to be the "low cost" way to shop. They are going to figure out if they can run on a skeleton staff this holiday. If so, e-commerce may lose its pricing edge.
Douglas A. McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
12-22-2008 @ 1:43PM
TX CHL Instructor said...
As far as Christmas is concerned, Bah, Humbug. I bought all of the gifts I plan to several weeks ago.
I see current ads for a number of nice items I'd like to buy for myself, but they will be even cheaper during the February Going-Out-Business sales.
I feel a bit like a chump for keeping my credit cards paid off, and not borrowing more than I can possibly pay back (knowing that BHO will surely 'save' me), but having cash when nobody else does does have its advantages. I learned that back when I was in the Navy -- I always cashed my paycheck a week after everyone else did. Not only did my money go farther, but I got a lot more female attention during shore leave by being the only sailor around with any money.