Holiday sales were lackluster this year, but analysts say don’t blame it on consumer worries about the “fiscal cliff.”
Retail sales increased just 0.7 percent during the holiday shopping season, according to MasterCard Advisors’ SpendingPulse report. It was the lowest percentage increase since 2008 and weaker than last year's 2 percent increase.
Kamalesh Rao, director of economic research for MasterCard Advisors SpendingPulse, said Hurricane Sandy played a large role in the weaker sales results.
“Hurricane Sandy really did wipe out a lot of retail capacity and there’s just a lot to deal with in the wake of Hurricane Sandy, so that really set us back a good couple of weeks,” Rao said.
The SpendingPulse report tracks sales in categories such as furniture, apparel and electronics. It doesn’t factor in auto, gas or food sales.
Analysts said the fiscal cliff had little impact on retail sales during the holidays, even though consumer confidence has taken a hit. Lawmakers must reach an agreement in order to avert the “fiscal cliff” by the end of the year, or else tax rates could increase and there will be government spending cuts.
Britt Beemer, CEO of America’s Research Group said his firm surveyed 1,000 consumers on Sunday. About 44 percent were following news of the fiscal cliff and of that group only 8.5 percent said it was going to impact their shopping. Those shoppers earn more than $75,000 a year.
More than half of the shoppers surveyed didn’t know what the fiscal cliff was, Beemer said.