People partied while Santa did his thing
By Dian Vujovich
Calling all merchants: If your shop’s coffers weren’t cha-ching cha-chinging during the holiday season, odds are it wasn’t personal. In short, shoppers spent more but not as much as anticipated even with cheap gas prices putting more money into their pockets.
A talking head I heard earlier this month said something that made a lot of financial sense and offered a good reason why the 2014 holiday season wasn’t as hot as many had hoped.
I’m paraphrasing here but basically he said, “When stores start advertising holiday sales in October, you know something is wrong.”
Although he didn’t explain exactly what wrong meant, aside from the stark realization that most American’s are having a rough time making ends meet, talking to a few local merchants I learned that getting orders filled from manufacturers wasn’t quick and easy because of tight inventories. Plus, the new-found gas money didn’t translate as much into product purchases as it did in people choosing instead to having a good time.
According to a Fortune.com story, “How did Americans spend the $13 billion they saved on gas?” less than one-third of it went to retailers. Which might help to explain why JCPenny and Macy’s are closing a number of their stores. Only a guess here, but it looks to me as through the huge over-the-top way-too-much advertising and flyers that both retailers flooded newspapers with last year cost more than it paid off.
Nonetheless, the National Retail Federation reported that holiday sales were up 4 percent in November and December over the previous year.
Back to how that $13 billion in the Fortune piece got spent. According to that story’s source, Customer Growth Partners, a firm that tracks stores’ sales, below is a partial listing of where American’s choose to spend some of their gas saving money during the last two months of 2014. Hint: Having fun:
•$4.9 billion was spent on using more gas.
• $1.8 billion went to entertainment such as movies, theme parks, content downloads and smartphone subscription/service fees.
• $1.3 billion went for eating at restaurants, fast food and bars.
• $1 billion was spent on “sin” products like tobacco, beer, etc.
• $1 billion was spent on home improvement: $1 billion.
• $500 million on consumer electronics.
To view the entire list and read the story visit: http://tinyurl.com/qafn2l5
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