NPD Group: Deep discounts taking a bite out of holiday dollar sales

Dollar sales for holiday 2016 are trending lower than last year — with some exceptions — and retailers are partially to blame.



According to The NPD Group’s weekly point-of-sale results for key general merchandise categories across in-store and online channels, dollar sales in the sixth week of the 2016 holiday shopping season were 5% lower than the same week in 2015. Cumulatively, dollar sales in the first six weeks of the 2016 holiday shopping season were 4% behind the first six weeks of the 2015 holiday season.



“The holiday lull of week six is deeper than retailers want, but they drove it with deeper and deeper discounts,” said NPD’s chief industry analyst Marshal Cohen. “This year’s trend clearly demonstrates how extreme promotions, now most noticeable in toys and electronics, are steering retail off the path of growth.”



In overall dollar sales performance, apparel was the only industry to outperform the same week last year, but was only up 1%. Toys saw their steepest declines of the season so far, down 9% compared to the same week in 2015.



Cohen noted that as shipping deadlines close, brick-and-mortar will recapture some of what online continues to steal by emphasizing online shopping with in-store pick-up.



“Colder weather across the country also changes the equation, starting with an awakening for outerwear sales,” he added. “In this final holiday push, we will begin to see new factors, beyond promotion, impacting holiday sales.”