U.S. holiday sales rose moderately last year, the retail
industry's main trade group said Tuesday, as chains lured
cash-strapped shoppers with big discounts and last-minute
deals.
Sales of holiday items in November and December rose by 3.8% to
$601.8 billion, up slightly from 3.5% sales growth last year,
according to the National Retail Federation.
Sales in December were strongest on clothing, which increased by
1.8%, but dropped on electronics and appliances by 2.5%. The
brightest spot for retailers remained online sales, which increased
by 9.3% from the year before to $95.7 billion.
Meanwhile, retail sales as measured by the Commerce Department
grew by a stronger-than-expected 0.2% in December. While those
results are encouraging to economists looking for signs that
American consumers are healthy enough to keep the sluggish recovery
moving ahead, underlying demand isn't strong enough for retailers
to meet their sales and profit goals across the board.
The result has been a zero-sum game in which rivals fight for
sales with discounts, often at the expense of profits.
"Undoubtedly, some of the increase came at the expense of
margin," said NRF Chief Economist Jack Kleinhenz. "Retailers are
still stressed, and a long-term promotional environment may
actually hurt the bottom line."
Macy's Inc., Target Corp. and Family Dollar Corp. have lowered
sales or profit forecasts in the past week.
Videogame retailer GameStop Corp. on Tuesday said its U.S.
holiday sales excluding newly opened or closed stores rose 7.1%,
driven by a doubling of hardware sales as new consoles were
released. But software sales were weak, and the company cut its
profit forecast below what had already been a downbeat outlook.
Write to Shelly Banjo at shelly.banjo@wsj.com
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