Retailers looking for post-Christmas rush on manufactured goods

December 27, 2012

U.S. manufacturers, who may have been hoping for pre-Christmas rush at the end of the retail year, will be turning their focus to shoppers looking for holiday season discounts.

According to Manufacturing.net, the American public opted for a more cautious approach to shopping this year, with retailers reporting that the expected rush of last-minute purchases failed to materialize, increasing the feeling that lean manufacturing will remain prevalent in 2013.

A report released by Mastercard showed that spending slowed at the end of the year, with economists believing that uncertainty over the fiscal cliff and bad weather in the days preceding the start of the holiday season may have contributed to the apparent drop in the sales of manufactured goods.

Electronics, clothing, home goods and jewelry retailers all revealed modest growth, with industry analysts posting a 0.7 percent rise in the two months prior to Christmas. This was in marked contrast to the predicted 3 to 4 percent rise that had been predicted, and it led to the worst year-over-year figures since 2008, with many shoppers reportedly making their gift selections some months before.

"A lot of the Christmas spirit was left behind way back in Black Friday weekend," said Marshal Cohen, an industry analyst at NPD Inc. "We had one reason after another for consumers to say, 'I'm going to stick to my list and not go beyond it.'"

Companies who maintain a commitment to quality management in manufacturing will still feel that there is cause to be optimistic in the coming months. Although there is a reported slowdown in the amount of purchases being made physically, online retail and e-commerce continues to be popular.

According to Reuters, companies such as Amazon reported an increase in the amount of goods being purchased over the internet for the eighth straight year. While there is still no word from lawmakers in Washington D.C. that the fiscal cliff can be avoided, recent surveys have shown that U.S. companies are expecting revenue from manufactured goods to increase in 2013.

Hurricane Sandy has been cited by some economists as a reason for the apparent downturn in retail, with sales dropping in regions affected by the storm. However, this ensured that online shopping benefited, with 10 percent of all holiday sales expected to come from virtual shoppers.

"Retailers still have time to make up lost ground," said Michael McNamara, vice president for research and analysis at MasterCard Advisors SpendingPulse. "The final week of December accounts for about 15 percent of the month's sales."