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Retail sales took a holiday

By ASSOCIATED PRESS
Published January 5, 2007

NEW YORK - This holiday season, the nation's retailers were prepared to do battle with consumers' penchant for holding out for the lowest possible price. In the end, the big stores lost.

Merchants successfully started the season with big discounts and expanded Thanksgiving weekend hours - some malls and stores even pulled all-nighters to make it more convenient for time-stressed consumers to shop. But December sales results released Thursday showed that procrastinating consumers forced retailers to rachet up those discounts more than expected right up to the last days of the season, costing the storeowners sales and profits.

The International Council of Shopping Centers-UBS sales tally posted a 3.1 percent gain in December, in line with its original expectations. That means for the November-December period, same-store sales averaged a 2.8 percent gain, slightly below the original forecast of 3 percent.

Analysts predict the struggle to continue in 2007 amid an uncertain economy that's making consumers cautious.

"There was no passion for shopping this holiday season," said C. Britt Beemer, chairman of America's Research Group, based in Charleston, S.C. "When you haven't got that passion, price was the motivator."

Consumers, though, apparently were motivated to shop online. Shopping for the holidays over the Internet grew 26 percent above a year ago, pushing last year's online shopping to $102.1-billion, ComScore said.

Online sales for the two months through Dec. 31 jumped to $24.6-billion, exceeding the 24 percent growth rate for the year, said ComScore Networks Inc. of Reston, Va.

The most lucrative day was Dec. 13, with $666.9-million spent, ComScore said.

The December disappointments cut through all categories, though apparel sellers particularly struggled with depressed sales of winter wear amid mild temperatures.

That could be a harbinger of weak profit reports when retailers release their fourth-quarter results next month. .

Wal-Mart Stores Inc. posted better-than-expected results for December following a dismal November, but the discounter's overall holiday season was its worst ever, analysts said.

Percent change in major retailers' December 2006 sales, compared with December 2005:

[Last modified January 4, 2007, 23:35:09]