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| January/February 2005 |
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Holiday '04 Sales Exceed Expectations January 25, 2005 The holiday season of 2004 ended on a strong note, with sales increasing beyond the rather dismal expectations. The National Retail Federation (NRF) reports the holiday sales growth as 5.7 percent, originally predicting a 4.5 percent sales increase. As predicted, the luxury sector led the way in holiday sales in 2004. Many shoppers chose to purchase high-end, quality items, rather than spending their money at retail discounters, which had been the trend for several years. Some jewelry retailers report dramatic increases in sales over the holiday season. Mayors Jewelers report its gross sales at $40.8 million — an increase of 14 percent — and same-store sales rose 15 percent. The same-store sales for Tiffany & Co. rose 6 percent during the holiday season, with diamond jewelry and watches selling particularly well. But Zale’s reports a 0.7 percent decrease in same-store holiday sales. Retail discounters like Wal-Mart did not fare as well as the luxury stores, even after steep discounts were offered to consumers. But Wal-Mart did have a modest increase of 3 percent during the holiday season, with annual sales reaching approximately $256 billion. Upscale retailer, Nordstrom Inc., reports an increase of 9.3 percent for the holiday season. Online merchants were quite pleased with the outcome of the 2004 holiday season. According to ComScore Networks, online retail spending grew 29 percent from 2003, with sales (excluding travel) reaching approximately $15.8 billion. The company also reports that annual online retail sales grew 26 percent, with sales totally $66.5 billion. Jewelry was the most popular item purchased online during the holiday season, with sales reaching nearly $1.9 billion, an outstanding growth of 113 percent, according to the 2004 eSpending Report. Flowers and computer hardware/peripherals were the other two categories that generated the highest year-over-year growth. The success of online retailers can be attributed to the willingness of more people to spend money online, with some having more confidence in spending online, which at one time was considered a rather risky venture. Others prefer to do their shopping from the comfort of their homes, taking advantage of some retailers who offer steeper discounts online compared to their physical counterparts. And many online consumers are enticed by the cost-effective shipping and handling prices now offered by various online retailers. As with most holiday shopping seasons, the procrastinating shoppers gave many retailers across the board the boost they needed to increase their holiday sales. Luxury items, including jewelry and brand name clothing, are expected to remain popular in the eyes of consumers. But some retailers may be holding their breath, as the NRF has predicted lukewarm sales growth in 2005. BACK TO: News & Updates |
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