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Early reports on the 2007 holiday shopping season reveal that spending during the crucial weeks between Thanksgiving and Christmas were lackluster -- as predicted by most retailers and industry experts.
At Convenience Store News' Forecast Council meeting in November, James Russo, vice president of business development for TNS Retail Forward, said the consumer research and consulting firm predicted fourth- quarter retail sales growth to slow to 3.3 percent, from 4.6 percent in 2006.
This forecast includes home improvement stores, catalogs, online sales and the key retail sectors -- where many holiday gifts are traditionally purchased -- known as GAFO: general merchandise stores such as conventional and discount department stores, supercenters, warehouse clubs, apparel stores, furniture, home furnishings, consumer electronics and other specialty stores, as well as home improvement stores, catalogs and online sales.
According to MasterCard Advisors, a division of the credit card company, spending from Thanksgiving to Christmas rose just 3.6 percent over last year, the weakest performance in at least four years. By comparison, sales grew 6.6 percent in 2006 and 8.7 percent in 2005, said the firm.
Michael McNamara, vice president for research and analysis at MasterCard Advisors, cited higher gas prices, a slowing housing market and a tight credit market, according to The Associated Press.
Excluding gas purchases, overall holiday sales rose a lackluster 2.4 percent, the credit card company said.
The final numbers are at the low end of MasterCard's already modest expectations, which were reduced in the middle of the season.
Much of this season's action appeared to unfold on the Web, which spared consumers a $3-a-gallon drive to the mall. Like MasterCard, ComScore, a research firm, found that online spending rose steadily to $26.3 billion, according to the AP.
MasterCard Advisors does predict that shoppers will spend up to $60 billion over the next seven days, as they redeem gift cards and exchange unwanted ties and sweaters for the items they truly want.