The early predictions were gloomy: the recession gripping the U.S. would make for a dismal holiday shopping season for retailers. And while many retailers certainly felt the effects of the economic downturn, holiday dollar sales in 2008 actually increased 5.8 percent or $99.5 billion across grocery and drug stores, mass merchandisers and convenience stores, according to Nielsen.
Categories that drove the highest sales spikes were musical instruments and accessories, with more than half of the purchases for the year made in the last eight weeks of 2008. Women's and children's fragrances, baking supplies and computer electronics products were also favorites.
Perhaps anticipating spending more time at home in the coming year, 10 percent of all homes bought new home entertainment equipment, with TVs accounting for 35 percent of those purchases. Almost two-thirds of those TVs were high-def units. Video game consoles added up to 18 percent of entertainment equipment purchases, while DVD players contributed an additional 11 percent of sales. VCRs continued their slow march to extinction, comprising less than 2 percent of sales.
DVD sales fell 14 percent in the last eight weeks of the year compared to the same period in 2007. Meanwhile, box office receipts climbed 11 percent to $1.655 billion during the holiday period with a number of holiday favorites hitting the big screen.
Read the complete review of holiday sales in the current edition of Consumer Insight.