- The Washington Times - Friday, January 6, 2006

A last-minute shopping push in the days before Christmas and Hanukkah capped a moderate 3.5 percent increase in holiday sales this year. Luxury and teen retailers fared well, while Wal-Mart had its worst December in five years.

Sales may have been up to 0.5 percent higher had consumers not been facing a double whammy of high energy costs, record-high fuel prices in the summer and high heating costs this winter, said Michael P. Niemira, chief economist at the International Council of Shopping Centers, a New York trade group.

Energy costs “made it a very promotional season from the get-go,” he said. “It made it also a very risky one for the retail industry because they really were unsure how strong sales performance would be.”

Internet sales increased nearly a third, partially because of high energy costs. Gift cards also had a good year, making up about 15 percent of sales.

The winners include discounter Target Corp., which said December sales rose 4.7 percent from a year ago in stores open at least a year.

December sales at rival Wal-Mart rose only 2.2 percent in stores open at least one year. This year, the world’s largest retailer cut prices more aggressively and earlier to try to boost sales.

“I don’t know if you can categorize it as anything but disappointing,” Ken Perkins, president of Swampscott, Mass., research firm Retail Metrics LLC, said of Wal-Mart’s sales. “Clearly they were experiencing some margin pressure because of their discounts.”

The retailer announced the sales numbers to investors in a spoof of the Christmas carol “Up on the Rooftop,” according to Reuters.

The jingle, which public relations specialists called a risky move when telling investors bad news, ended with a response to questions about where the company is expanding next: “Ho, ho, ho, would you like to know, ho, ho, ho, would you like to know, what country’s next, oh we can’t tell, just buy our stock, don’t sell, sell, sell.”

The luxury and teen retailers were the ones able to sell, sell, sell this year, though. Sales at luxury stores, including Nordstrom Inc., rose an average of 6.4 percent this month, according to ICSC. Big box stores followed at 5.2 percent, and department stores 3.3 percent.

Aeropostale, a clothing retailer that deeply discounted last month, saw sales rise 11.4 percent. Sales at Abercrombie & Fitch Co. climbed 29 percent, higher than estimates of 19 percent.

“Abercrombie really had what teens were looking for,” Mr. Perkins said. “Aeropostale was very promotional and able to execute well.”

Shoppers spent an additional $30.1 billion online this year, a 30 percent jump from 2004, according to Nielsen/NetRatings, a New York firm that measures online traffic.

In comparison, the ICSC estimates that $152.7 billion was spent at traditional chain stores in November and December.

People spent more time — an average of 1 hour and 24 minutes — researching prices online, said Heather Dougherty, a senior retail analyst at Nielsen/NetRatings. Once they were at the Web sites, shoppers were found to be more likely to make purchases.

“Shoppers were particularly price sensitive with gas and heating costs,” Ms. Dougherty said.

The moderate retail numbers may see a boost this month. There’s still some holiday spending left to be tallied.

The ICSC estimates that 15 percent to 18 percent of holiday spending was for gift cards, up from 14.5 percent last year.

Gift cards aren’t counted for sales purposes until they are redeemed, meaning more “holiday spending” could be seen in January’s retail figures and later.

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