Consumer Spending - January - 2009
Both national and Districtwide holiday sales were disappointing but in line with expectations. Consumers were extremely price conscious, and sales were driven by deep discounting. According to District retail contacts, low- and midpriced products were strong sellers in December; sales of high-end products and jewelry were particularly weak. Retailers also noted a drop in credit card transactions. Shoppers were using cash, debit cards, and checks for purchases.
Looking ahead, weakness is expected to persist, and retailers are expected to close underperforming stores. Some merchants will seek bankruptcy protection.
Vehicle sales in the Southeast weakened sharply. Through October, District new vehicle registrations dipped 27.6 percent from a year earlier while national registrations were down 24.4 percent. The decrease in District registrations was due to declining truck and SUV sales; Florida and Georgia, the region's top vehicle markets, posted the largest drops. Contacts from leading import distributors reported the worst December sales performance in years across all models. Sales of District-assembled vehicles through December were equally troubling. All companies posted doubled-digit declines from a year earlier as regional vehicle markets were hit by tight credit and rising unemployment. Sales of District-assembled vehicles plunged 24.2 percent from a year earlier while total vehicle sales nationally declined 18 percent.
Tourism activity was mixed in December. Attendance at District star attractions, such as Disney World and Sea World, was strong through the holiday season. According to reports, some of these attractions saw a decline at the end of the third quarter, but tourism activity picked up in the fourth quarter. New rides at Orlando theme parks and lower gas prices were expected to benefit Orlando and other drive-to destinations in the District. Passenger traffic at the Louis Armstrong Airport in New Orleans also increased after a sharp dip in September. Cruise lines were running at capacity, but casino revenues have been affected by the downturn. Mississippi casinos reportedly lost 2,300 jobs through November 2008. Gulf Coast casino revenues increased somewhat in October after falling sharply in September.