E-commerce News

You’d expect the holiday shopping season to provide a natural boost to overall retail sales for the month of December.  But as we learned yesterday, you’d be wrong.

The Commerce Department reported that retail sales were down 0.3 percent last month from November 2009.  Many pundits blame the decrease on the nation’s double-digit unemployment rate and plummeting home values both of which continue to have a tangible effect on consumers’ psyche and confidence.  Regardless, this data is a clear sign that the economic recovery so many of us thought was well underway still faces a long, uphill battle in the coming year.

Commerce’s figures were weaker than a slew of similar data that emerged last week, most of which indicated retails sales gains in December. The revised information from the government detailing sales decreases can largely be attributed to the fact that it includes results from smaller niche retailers often overlooked by non-government analysts.  And those “mom and pop” merchants are losing customers across the board to bigger chains.

The December sales drop is the first back-to-back regression since September and was obviously way off from economists’ forecast of a 0.5 percent increase.

In related news, one retail area that bucked the weak December trend was the video game industry, which posted a 4% sales gain in the U.S. last month.   Even with the strong month, 2009 was still a rough year for video games, consoles and accessories, with overall sales down 8 percent from the year before according to a private research firm.

Nevertheless, a strong December proves just how much video games are rocketing up the list of most desired products out there during the holiday shopping season.

Game consoles dominated sales in the industry in December, accounting for $2.2 billion in sales, up 16% from the prior year.  Nintendo Wii was the biggest seller, with 3.8 million units sold.  Sony sold 1.36 million PlayStation 3 consoles, far and away its best month ever, while Xbox 360 reported 1.31 million units sold.

And finally, Activision announced that its Call of Duty: Modern Warfare 2 tallied more than $1 billion in retail sales around the globe in a little less than two months on the shelves, making it the fourth most-popular video game ever.