NEW YORK — The holiday season was a major bust for many general merchandise retailers, as consumers chose to spend the money they have been saving from lower gas prices to buy groceries or put away in savings, according to reports.
The International Council of Shopping Centers here last week said sales at the nation's chain retailers during the week that ended Dec. 27 were down 1.8% compared with a year ago, capping what it said was the worst seasonal sales performance for retailers in nearly four decades.
“The procrastinating holiday shopper met heavy snowfall in the last days ahead of Christmas, which further weakened the week's sales pace,” the ICSC said in its report. “The 2008 recession, widespread heavy discounting and adverse pre-holiday weather all coalesced to produce the weakest holiday season since at least 1970.”
The results, according to the ICSC, could prompt some 73,000 stores to go out of business in the first half of 2009, following the closure of an estimated 148,000 stores in 2008.
Retailers are scheduled to report their December same-store sales this Thursday.
Some reports said consumers, in anticipation of a difficult year ahead, socked away the money they have been saving since gas prices declined sharply, rather than spending it on holiday gifts. The price of gas has fallen by more than 50% from its peak in July.
But according to one survey, nearly half of U.S. consumers said they are using the money they are saving on gas to buy groceries.
According to Toronto-based analytics firm Precima, 48% of 3,013 survey respondents said they are spending their gas savings on groceries. That was followed closely by putting the money into savings (42%), holiday gift buying (37%), paying off credit cards (30%), entertainment (10%) and other uses (14%).
Of respondents who said they have suffered a direct financial loss during the recession, 55% said they are spending their gas savings on groceries, and among those with annual incomes under $35,000, about 59% said they are buying more groceries.