Luxury Sales See Huge Declines This Holiday Season

MasterCard SpendingPulse says this holiday season was the "most challenging" in decades.

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Despite retailers' attempts to attract shoppers with deep discounts, the final week of holiday shopping was pretty much a bust. The culprits: a dismal economy coupled with poor weather, according to MasterCard's SpendingPulse 2008 Holiday Wrap-Up Report. Retailers' sales fell as much as 4 percent during the holiday season. "It's probably one of the most challenging holiday seasons we've ever had in modern times," said Michael McNamara, vice president of Research and Analysis at MasterCard Advisors.

The luxury category—jewelry in particular—had the biggest year-over-year declines, with sales down by more than 34 percent over last year, according to the SpendingPulse report. Excluding jewelry, luxury sales declined more than 21 percent, says the report.

I shopped around Georgetown last Tuesday for some last-minute gifts. I braced myself for crowds but saw very few shoppers for this time of year and navigated my way through each store effortlessly. How much shopping did you do in the past week—if any?