Wimpy Christmas Sales: Told You So

So here we are a week into the New Year and the whining has begun about the business of Christmas.

Santa was not nice to retailers the media reports. (Even the post-Christmas returns are making headlines.)

Target says it was a ho-hum holiday. JCPenney and Kohls both report that deep discounts hurt earnings. Walmart does not report monthly sales but based upon all the hype of post-season marketing efforts one can only assume there is still a lot of stock left on Wally’s shelves. Only the retail drugstore segment is reporting December increases in line with projections. Between end-of year healthcare cafeteria plans that had more folks switching to generics and the increased sales of extra-strength Tylenol Walgreens is one of the few happy campers post-Christmas.

Christmas sales were, in a word: lousy.

Surprised? We told you it would go this way.

The storms aligned early for a poor holiday selling season in 2012: election year politics, Hurricane Sandy, and the Newtown school massacre were all reasons given by retailers for tepid results. What the media, government and retailers do not want to admit is that consumers were spooked mightily by the fiscal cliff – and had been for months.

By the time it is all said and done 2012 will go down – and remember you read it here first – as the worst year in retail sales since 2008. Mark it down—not just Christmas, but the whole year. The economy is in recession right now and the back dated reports will show this in the months ahead.

Abby Newton of Carlsbad, California spent a lot less this Christmas. “Fiscal cliff or no we saw our taxes increase beyond compare here in California and more is coming,” Newton said. “We might have to move, we just cannot take the expense of it anymore. Our Christmas was subdued this year because of it all. Our job is uncertain, our future is uncertain. It was a really mellow Christmas.”

One retail segment bucking the modest trends of the season is firearms and ammunition. “We knew it would be crazy at Christmas but we didn’t know it would get this nuts,” said Bud Palmer, a salesman for Cabelas in Reno, Nevada. “Every time there is a major event like Newton where guns become the center of controversy we see a rush. The talk builds of making arms illegal and it just forces more people to go out and buy guns.” The firearms segment of retail has been hot all year as fears of an Obama administration ban on weapons has built during the campaign season. Reports of shortages of certain types and models of guns and ammunition have surfaced all year. The backlog of background checks necessary for legal gun purchases is at historic levels.

Retailers may blame outside influences for poor sales but some analysts say that retailers really need to look at themselves if they want to honestly assess blame. Target’s partnership with Neiman Marcus backfired sending a pricier message when consumers were in no mood to hear it. JCPenney baffled experts and consumers alike with their stark merchandising, low-key signage and lack of sales promotion that created a tomb of many Penney locations during what are traditionally the busiest weeks of the year.

For those of us working in retail or for those of us who just like to shop for Christmas these are tough times indeed. We knew last summer it was going to be this way. We can only hope that the economy shakes off the blahs of an election year and put us all in a merrier spending mood next season.