Online shopping drops with consumer confidence

US traffic to Internet store websites during the week ending 25 October was 3% less than it was during the same period last year, according to market-tracking firm Hitwise.

The drop marked the eighth consecutive week of decline in visits to online stores by US shoppers, Hitwise reported.

"These declines have strong implications for the upcoming online holiday season as well as offline sales," said Hitwise research director Heather Dougherty.

"Everyone is aware of the role that the Internet plays to influence offline sales through research, so this slowdown may indicate a further ripple effect in sales in retail locations."

Music sales websites saw the biggest drop in US visits, which fell by 21% compared to that week last year.

US consumer confidence plunged to a record low in October as consumers felt the bite of the credit crisis, according to business research firm The Conference Board.

The Board's consumer confidence index plummeted to 38.0, down from 61.4 in September.

"This news does not bode well for retailers who are already bracing for what is shaping up to be a very challenging holiday season," said Lynn Franco, the Conference Board's chief economist.

A week before the US holiday shopping season starts, there is little Christmas cheer in the air for US stores, with the crashing economy leaving shoppers morose and only discounters eyeing escape from a looming debacle.

In a new report Standard & Poor's Ratings Services predicted "the most difficult holiday season in memory" for the retailers as American consumers rein in shopping amid rising layoffs and deeply troubled markets.

In the best case, S & P says, retail sales for the November-December holiday season will be flat compared to last year's $255 billion.

But a "more likely scenario," it said, is that sales will fall two percent, to just $250 billion.

Source: AFP

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