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Christmas Spending Burst Boosted Sales
A last minute burst of Christmas shopping helped give a strong boost to holiday spending, with sales of apparel and big-ticket items leading the way, according to a retail report released today.
Online retailer Amazon.com also reported its best holiday shopping season ever, backing up expectations of a large increase in Internet shopping this year, and retail giant Wal-Mart said that sales on Sunday exceeded expectations.
Holiday season sales, excluding gasoline and automobiles, through Dec. 24 rose an estimated 8.1% compared with the same period last year, according to MasterCard Advisors, a division of the credit card company. The survey results, which are projections based on purchases made on MasterCard credit cards, include items sold online as well as sales of gift cards.
Michael McNamara, research director for MasterCard Advisors, said sales activity, after stalling in the weeks before Thanksgiving and Christmas, picked up steam in recent days.
"It was a very solid performance, even when you factor in the [extra] two days," McNamara said.
The largest year-over-year increases were reported in retail apparel, up 9.8%, and home furnishings, up 9.7%, according to the report. (The results by category do not include gift cards or online sales.)
Survey results also seemed to support expectations that sellers of luxury and expensive goods would fare better than discounters. Average transactions below $99 increased 5.8% compared with last year, while average transactions above $1,000 jumped 13.5%.
"We didn't know it was going to be that strong," McNamara said of big-ticket sales.
The holiday sales gains reported by MasterCard Advisors are well in excess of many industry estimates, many of which exclude popular gift cards or online sales. Many analysts scaled back their holiday sales forecasts this month in the wake of softer-than-expected sales after a strong start during the Thanksgiving weekend.
The National Retail Federation projected that holiday sales would total $219.9 billion this year, a 4.5% increase over 2003.
Meanwhile, online holiday season purchases were expected to leap nearly 26% above last year's results to more than $15 billion. Amazon.com, without releasing sales results, said that it set a single-day record with more than 2.8 million items ordered.
During the Thanksgiving holiday weekend, Amazon sold more consumer electronics than books for the first time since the online retailer was founded a decade ago.
Amazon shares rose more than 10% on the Nasdaq in early afternoon trading.
Meanwhile, Wal-Mart Stores, the world's largest retailer, said today that it saw "strength" in food and general merchandise sales last week. Sales of gift cards "are up significantly over last year," the company said.
Shares of Wal-Mart on the New York Stock Exchange were up more than 1%.