Tuesday, December 25, 2007

Online Sales Slip Below Forecast

Breaking News from MoneyNews.com

Online sales numbers out just before Christmas missed forecast growth rates and trailed last year’s increase.

Online buying was up 19 percent between Nov. 1 and Dec. 21, reaching $26 billion, according to comScore, the online spending tracker in Reston, Va.

That’s off from the 20 percent increase comScore had predicted for the period and down from 25 percent growth the year before. It’s also the first time sales did not exceed 20 percent growth since comScore began tracking the figure in 2002.

Rising gasoline and good prices are making a dent in online shopping, just as it has done so far for bricks and mortar retailers.

Consumer sentiment hit 75.5 for December, according to the Reuters/University of Michigan index. That’s the lowest point since October 2005.

The online buying survey excludes travel, auction sides like eBay and big corporate purchases done online.

Last-minute shopping gave the index a bump.

“We are continuing to see online spending strength as we get deeper into the season, with the most recent five-day span ending December 21 exhibiting a 25-percent growth rate versus year ago,” said comScore Chairman Gian Fulgoni.

Nevertheless, Dec. 10 — known as “Green Monday” — will remain the biggest spending day of the year online, at $881 million spent on that day alone.

“At this point of the season, the heaviest online spending days are now well behind us. However, with some online retailers offering deliveries before Christmas for orders placed by December 22, and in-store pickup available for orders placed on Christmas Eve, we expect to see above average growth rates continue through the holiday,” Fulgoni said.

It probably isn’t helping that Americans are falling behind on credit-card debts they already have.

The value of credit card accounts at least 30 days late jumped 26 percent to $17.3 billion in October from a year earlier at 17 large credit card trusts examined by the Associated Press.

That represented more than 4 percent of the total outstanding principal balances owed to the trusts on credit cards that were issued by banks, such as Bank of America and Capital One and for retailers like Home Depot and Wal-Mart.

"Debt eventually leaks into other areas, whether it starts with the mortgage and goes to the credit card or vice versa," Cliff Tan, a visiting scholar at Stanford University and an expert on credit risk, told the AP. "We're starting to see leaks now."

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