ComScore: U.S. Internet holiday sales fell 3%
Online spending misses forecast, reflects slowing U.S. economy
By Danny King -- Video Business, 12/30/2008
DEC. 30 | U.S. online retail spending for the holiday season fell 3% from a year earlier despite higher Internet traffic, marking the first year-over-year drop since such sales began being tracked in 2001 and illustrating the effect of a slowing economy, ComScore said in a report today. Apple and Amazon.com received more Web traffic while Circuit City and Overstock.com had substantial declines.For the 53 days ended Dec. 23--the last day items could be ordered online and shipped in time for Christmas--customers spent $25.5 billion online, down from $26.3 billion a year earlier, ComScore said. Online spending had been down 1% as of Dec. 19, said ComScore, which had forecast holiday Internet sales to be equal to last year. December Web traffic through Christmas Eve rose 5% from a year earlier.
Retailers both online and offline have experienced lower holiday sales because of the combination of the U.S. economic downturn, bad weather and the need to discount items in order to move inventory. The International Council of Shopping Centers earlier today said U.S. chain retailers had their worst holiday season since at least 1970.
"The combination of having five fewer shopping days between Thanksgiving and Christmas and the severe economic headwinds faced by consumers has made this a really tough season for retailers, both offline and online," ComScore Chairman Gian Fulgoni said in a statement today.
Consumer-electronics sales appeared to worsen as the holiday season progressed while sales of DVDs and CDs over the Internet were also down. ComScore earlier this month said consumer-electronics sales over the Internet fell 9% from a year earlier for the 19 days ended Dec. 19 after being even for the first two weeks of the month, signaling that consumers have cut spending on components since being lured by sub-$200 Blu-ray players and cheaper flat-screen TV sets during the week following Thanksgiving. DVD and CD sales were down about 24% at as of mid-December. ComScore didn't break out specific retail categories today.
Revenue at U.S. chain retail stores last week fell 1.8% from a year earlier, helping to plunge this year's holiday season sales to their worst in almost four decades, ICSC said in a report earlier today.
Meanwhile, NPD Group said in a report earlier this month that about four out of five people polled planned to spend less than in December 2007, reflecting the belief by 55% of those surveyed that their financial circumstances will worsen next year.
The online spending decline appeared to hit Circuit City and Overstock.com particularly hard. Web traffic to Circuit City, which filed for bankruptcy last month, dropped 21% for the 24 days ended Dec. 24 while Overstock.com saw its Web traffic decline 16%, ComScore said today. Amazon.com, the world's largest Internet retailer, had a 7% increase in Web traffic while Apple, whose iTunes service earlier this year overtook Wal-mart as the largest U.S. music retailer, had a 19% jump in holiday Web traffic.
Year-over-year change in Web traffic Dec. 1-24
|
Apple |
19% |
|
Amazon.com |
7% |
|
Wal-Mart |
4% |
|
Best Buy |
0% |
|
Target |
-1% |
|
EBay |
-4% |
|
Toys R Us |
-9% |
|
Overstock.com |
-16% |
|
Circuit City |
-21% |
|
Overall |
5% |
Source: ComScore
