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U.S. Retail Holiday Sales Plunge
Friday, 26 December 2008 15:28:59 GMT  |  Christopher Vecchio, DailyFX Research
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Despite massive price-cuts in an attempt to save the holiday shopping season, 2008 proved to have the worst holiday retail sales in decades amid decreasing consumer spending. As American consumers curb spending due to the recession, climbing unemployment, and tightening credit conditions, sales dropped by 2.5 percent in November and 4.0 percent in December (through December 24), according to SpendingPulse. Notably, these figures exclude gasoline; gasoline prices have dropped over 40 percent from the year previous. The fall in holiday retail sales including gasoline are 5.5 percent and 8.0 percent for November and December, respectively.

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The decline is strikingly worse than expect, as early industry forecasts predicted a more modest 1.0 to 2.2 percent drop. Declining sales earlier in the year already led to bankruptcy filings from Circuit City Stores Inc., while Linens N’ Things Inc. was forced to liquidate. Slumping retail holiday sales numbers could pave the way for more large chains to take a similar path in 2009.

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