Yesterday, I noted the Good — Not Great — Holiday Shopping Season.
Today, I want to delve into this a little more: The NYT reported that the nation’s merchants trotted out deep discounts
before Christmas, and lured enough last-minute buyers to deliver "decent, if unspectacular, sales gain of 3.2 percent in December."
Let’s tack on one more prediction for the holiday shopping season ’05: Margins were
significantly pressured by discounting. That may show up as a negative in the Q4 earnings season
for retailers, which starts in about 3 weeks.
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click for larger chart 
Courtesy of NYT
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Now we wait for the gift card recipients to shop — they will put the Coda on the holiday shopping season for 2005 . . .
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Source:
Retailers Find Little to Cheer
MICHAEL BARBARO
NYT, January 6, 2006
http://www.nytimes.com/2006/01/06/business/06shop.html
December chain store sales up 3.2 percent
Shopping Centers Today
International Council of Shopping Centers, January 05, 2006
http://www.icsc.org/srch/apps/newsdsp.php?storyid=2080®ion=main
Stores don’t book sales of gift cards as soon as they are sold? Why not?
They already have the customer’s cash, the cards cannot be used elsewhere, and generally the retailers don’t offer refunds on the cards, just merchandise.
Also there’s always the gift card that never gets used… Do they intend to never book *that* revenue? I don’t understand why the earnings from gift cards aren’t stated immediately.
Because according to double entry bookkeeping, its a liability until a sale is made.
Asset (cash) on one side, Liability (debt) on the other
Under accounting rules, a gift card is technically an interest free loan made by a consumer to the store — its not a sale until a purchase is made.
Investor’s Business Daily
Thursday, Jan 5 2005
Retail sales likely up 3.1%, vs. a prior view of 3.2% (based on info from Retail Metrics).
Total music sales are also not strong, including revenue from digital sales (see Thur Jan 5 FT).
Nate: I addressed Music Sales back in the last week of 2005:
Annual CD Sales Slide Resumes; Down 8% for ’05
to make more clear:
“total music sales are not strong, including revenue from digital sales”
digital sales may be up for digital music, but not enough to offset declines in other music sales. total music sales were flat to declining in year 2005 (according to an article in the Thur Jan 5 FT).