Don’t Judge the Results Until the Gift Cards Are Redeemed

Are we heading in the right direction or are we still sliding off that proverbial cliff. Early findings of the season are not always what they seem. The International Council of Shopping Centers and Goldman Sachs released its survey showing sales rose 2.3% for the week of December 26th. It estimates a 2% increase for the month of December.

As individual companies report same store sales in the early part of January, make it this year’s resolution to wait for all the information to come out before making judgments. Consumer spending makes up more than two-thirds of GDP, so I understand how important it is to the economy. But, gift cards are not included in the figures. The sale is not recorded until the shopper spends the amount.

Even during the dismal times of a year ago, Americans still shelled out almost $25 billion on gift cards.
Consumer Confidence inched up to 52.9 in December from 50.6 a month ago. People were feeling a little better about the economy, but still not great. I expect to see a rise in practical gifts, and bargain hunters no doubt found places such as TJMaxx and Ross Stores, with name brands at a discount, a haven to buy their loved ones presents.

But, when same store sales are reported, don’t get too euphoric or depressed. Wait until January is over, when the gift cards are redeemed. By then, a better picture should emerge on the economic outlook for the coming year.