Tuesday, December 21, 2004

SPOTLIGHT: Holiday shopping

Last-minute spree? Maybe not

THE TRADITIONAL last-minute Christmas shopping spree may not be so last-minute as you think.

True, many consumers make an 11^th hour rush to the local mall to fill up those Christmas stockings. But analysis of retail sales shows there is a tad more method to shoppers' madness.

The study examined the impact of Christmas shopping on retail sales and employment for the months of November, December and January, looking at different store types.

It showed that consumers start buying big-ticket items in November. However, they wait until December to buy less expensive Christmas gifts.

For example, retailers who sell mostly expensive items, such as furniture, electronic equipment and appliances, had sales in November 2003 that were 12.4% higher than the monthly average for the entire year.

CDs and toys

In contrast, retailers specializing in less expensive items, such as CDs and toys, had sales in December last year that were 65.3% higher than the monthly average for the entire year, after a relatively quiet November.

This suggests that a lot of shoppers tended to wait until the last minute to buy less expensive gifts.

Retailers tweaked staffing levels in anticipation of these holiday shopping patterns. Employment levels rose sooner for stores selling mostly big-ticket items, and more sharply in December for stores offering primarily less expensive items.

And if you think that January is busier than it used to be, you're probably right.

There are indications that the traditional slump in sales in January may not be as severe as it has been in the past, at least for some retailers.

Consumer spending in retail stores has eased off in November and December, and gained ground in January.

Gift cards

Consumers appear to be transferring some of their buying power to January. The popularity of gift cards might be one of the factors behind this new trend.

Overall, retailers sold more than $330.5 billion worth of goods and services in 2003. Sales for the holiday season, that is, November and December combined, amounted to $59.5 billion, or 18% of the annual total.

In December last year alone, retailers sold more than $32 billion worth of goods and services, up 3.2% over December 2002.

Higher demand translated into more jobs in the retail industry, excluding non-store retailers. Employment in retail stores hit 1.62 million in December 2003, nearly 38,000 more than the level in December 2002.

You can read the analytical article "Consumer holiday shopping patterns" free on our website.

For more information, contact Yiling Zhang (613-951-2211), Distributive Trades Division.

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© 2004, Statistics Canada.