The latest confirmation of consumers tightening spending arrived with news from comScore that online holiday sales registered the first-ever year-over-year decline since tracking holiday e-People Aren’t Spending Their Moneycommerce sales began in 2001. The firm said online spending for the first 49 days of the critical November-December gift-buying period fell 1% to $24.03 billion compared to $24.15 billion over the same period last year. This decline is a bit alarming and may be indicative of an overall slow down in holiday sales this season.

The National Retail Federation (NRF), the industry’s largest trade group, still estimates that total holiday sales will grow 2.2% this year, which may prove optimistic and would still represent the weakest gain in six years. However, several other retail experts expect a worse performance, and are even forecasting the first-ever decline in overall retail sales. Since online sales are down, I personally fear overall sales will follow suit this holiday season. Here at JumpFly, we are hearing clients citing economic concerns with increasing regularity.

Following a strong week for online sales after Cyber Monday, driven by large discounts on consumer electronics products, comScore said sales slowed significantly in recent weeks. The softest categories included music, movies and videos (down 24%); office supplies (down 19%); jewelry and watches (down 17%); and home, garden and furniture (down 16%). Some bright spots included sport and fitness (up 31%); books and magazines (up 18%); and video games, consoles and accessories (up 17%).

A recent NPD survey conducted earlier in December indicated that 31% of consumers said they were concerned about their job security and had cut back on their spending. Fear is a powerful motivation to curb spending, as witnessed by this year’s dismal holiday sales season. Let’s hope that 2009 brings better times for our struggling economy.

Happy Holidays to all. May 2009 bring you all great health, wealth & happiness.

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