Holiday sales last year amounted to 579 billion dollars, a 3.5% increase from 560 billion dollars in 2011.
Over the past ten years sales went up about 3.5% each year. In the 2012 holiday season, sales amounted for 20% of retail sales, and 20-40% for some retailers. In fact, holiday sales are predicted to add 750,000 seasonal workers alone this year. Holiday sales are very busy, with Black friday, Super Saturday, and the Sunday before Christmas being the busiest times of year.
However, foot traffic has declined this holiday season, as many people are now shopping online. Online holiday sales are predicted to have(and are) risen 15%, or up 82 billion dollars since last year. All this sounds like great news for the general public, but for investors and retailers themselves, holiday season and its discounts means thinner profit margins. “We don’t have an economy that is growing very fast. Prices are coming down in most cases,” says Jim McNerney, head of the Business Roundtable.
Wal-mart went overboard with discounts, causing rival Target to be unable to keep up after Thanksgiving, and causing Best Buy Co. Inc. to drop prices more than it would have liked. As a result, investors have began to hedge against a decline in the retail sector. Bets that Wal-Mart shares will fall have jumped 20%.
. As we enjoy the sales, retailers are suffering from smaller profit margins, and stocks are going down.