Retailershad high hopes on holiday season having lived through perhaps the mostdepressing period since Great Depression. All were agreed that sales will pickup, but how much, nobody knew. The Stitch Times has collected andcollated the information on the prominent world markets like the US, the EU, Japan and China as how the retail sales moved. While there are signs of worldwideeconomic recovery, as year-end sales increased slightly in the United States and the United Kingdom and surged on the Chinese mainland, moderate declines, however,were recorded in other major markets, including Germany, Italy, France and Japan. Here are the initial findings:


United States


The US posted a marginal sales increase overlast season's worst performance in decades. Sales began slowly afterThanksgiving and remained sluggish through December despite increasinglyintensive retail promotions and one additional shopping day over last year.Sales were further hampered by a severe snowstorm across large portions of thecountry. Despite improved consumer sentiment, shoppers continue to trade down,with luxury and big-ticket items selling poorly and practical, smaller ticketitems sought after. Retailers are posting higher profit margins by reducinginventories to avoid the heavy markdowns seen last season. Promotionalactivity, especially early in the season, was less rigorous and discounts wereless extensive. More retailers introduced layaway programmes to reservemerchandise for customers until they completed installment payments. Thequickie retail operations known as "pop-up" are visible throughout Southern California and around the nation, filling in the gaps at recession batteredshopping centres for a fraction of the rent. Mass merchandisers and discounterswere favoured, though department stores and luxury stores fared slightly betterthan last year. Many online retailers posted double-digit sales gains asvalue-conscious consumers were drawn to convenient price comparison, extensivepromotions and free delivery offers. Leading retailers launched an innovativesales drive by targeting smart phone users. Gift cards became more popular asmust-have gift items ran out of stock, but Christmas sales results areeffectively reduced since revenue is not counted until the cards are redeemed.Clothing, footwear and basic commodities offering comfort and function werewell received, while high-fashion items such as upscale timepieces andjewellery were in the doldrums.


European Union


Festive spending in the EU remained cautiousbut less gloomy than last season. Christmas shoppers appeared more willing tospend, but continued to trade down and stick to budgets as they hunted forbasic and practical products as well as second-hand items. A strong euroenticed many continental buyers to shop abroad. Cold weather did notsubstantially affect Christmas shopping, since it only delayed year-endpurchases and boosted sales of winter clothes and related merchandise. Most EUretailers continued to rely on discounts and promotions to attract strugglingshoppers, but offers were less prevalent than last season as retailers trimmedtheir inventories. Hypermarkets continued to attract more customers thandepartment stores and luxury stores. Online retailers offering convenient pricecomparison, wider availability of products and better delivery options wereanother winner this season. More brick-and-mortar retailers turned to online aswell as pop-up stores to bolster sales. Germany's Christmas saleswere estimated to have declined slightly from last season, as consumerconfidence there remained weak. Italy benefited from reviving globaldemand, but overall consumer sentiment remained flat, as shoppers mostlysnapped up consumer electronics and toys. Flat-panel TVs, mobile phones,notebooks, video games and some basic toys were popular with Italian shoppers. Frenchconsumer confidence remained cautious despite higher festive spirits. UK Christmas sales were boosted by a last-minute surge to post a slight rise fromlast season's worst showing in 30 years. Part of the increase was driven byadvance purchases to avoid a January 2010 VAT increase from 15 per cent to 17.5percent. A weak British pound also drew continental bargain hunters, allowingmoderate sales growth for most items.

Japan


As the strong yen cast a long shadow on Japan's export-led recovery, festive shoppers remained cautious amid fears over job losses and winter bonus cuts. The soaring yen also suppressed year-end retail business, as shoppers headed overseas. To cut costs, holiday shoppers mainly chose basics rather than extravagant gift items and shifted from department stores to discount stores. Demand for clothing and footwear was hampered by relatively warm weather, and toys sales were affected by a lack of hit items. Chinese Mainland


China was relatively in a more buoyant and festive mood. More and more retailers put up yuletide decorations and engaged in Christmas promotional activities as the holiday, which is not traditionally celebrated across the mainland, begins to catch on in the more advanced urban cities. Hearty retail sales have been reported for most consumer products, ranging from basic and practical items to upscale and luxury merchandise. Many mainland consumers also thronged to Hong Kong for holiday shopping sprees.




Originally Published In the Stitch Times: February 2010