Although holiday shoppers spent $42.3 billion online this holiday season—14% more than they did at the same time in 2011—ComScore says that sales lagged sharply starting in early December. It believes that uncertainty generated by the fiscal cliff—the possibility that taxes would increase, government spending would fall, and Congress would have to debate the debt ceiling all over again—produced a “December swoon,” preventing online spending from reaching the $43.4 billion that was expected.
Says ComScore Chairman Gian Fulgoni:
While November started out at a very healthy 16% growth rate through the promotional period of Thanksgiving, Black Friday and Cyber Monday, consumers almost immediately pulled back on spending, apparently due to concerns over the looming fiscal cliff and what that might mean for their household budgets in 2013. With Congress deadlocked throughout December, growth rates softened even further and never quite made up enough ground to reach our original expectation.
Admittedly, online retailers did see a late surge on the first ever “Free Shipping Day” on Dec. 19, which accounts for the one-week spike you see in the chart above. Otherwise, strong spending in November slumped significantly in early December, from 17% more money spent year-over-year during the week ending Nov. 25 to just 9% more spent the week ending Dec. 9.
And it does make sense that concerns about fiscal policy would impact consumer spending. Even the deal that was reached on Monday, while avoiding tax rate hikes for most Americans, allowed the payroll tax cut to expire, meaning that anyone earning $50,000 in 2013 will have to pay another $1,000 in taxes.