US retail sectors saw growth in December

CHICAGO: US retailers largely experienced a strong finish to the 2009 holiday season even though sales fell at apparel chains and department stores in December, according to MasterCard Advisors' SpendingPulse.

Online retailers, jewellers and consumer electronics retailers all saw sales gains last month, SpendingPulse said on Jan 6.

The findings back up Wall Street's view that retailers were able to sell more merchandise without resorting to drastic discounts as many had to in late 2008 during the global financial crisis.

"In general what we had was a pretty decent holiday season, I think you saw sort of a cautious return to spending. It wasn't an amazing holiday season," said Kamalesh Rao, director of economic research at SpendingPulse.

The weakness in 2008, when holiday season sales fell for the first time on record, made year-over-year comparisons look better. Compared with December 2007, sales in December 2009 in most sectors SpendingPulse tracks likely fell about 2% to 3%, with online showing the only rise, Rao said.

SpendingPulse findings reflect activity the group tracks in the MasterCard payments networks as well as estimates for other payment forms such as cash and checks.

Investors will get a closer look at spending on Jan 7 when many top retailers report their December sales at stores open at least a year.

Analysts expect a 2% increase in December same-store sales at 30 retailers tracked by Thomson Reuters Data. The International Council of Shopping Centers said on Jan 5 it expects December same-store sales to rise about 2.5%, up from its earlier forecast for a 2% rise.

SpendingPulse previously said retail sales rose 3.6% from Nov 1 through Dec 24.

While Rao did not update that figure to include the final days of December, he suggested that early signs of a recovery in the retail sector emerged in late 2009.

"We entered into either a period of sort of modest or moderate growth, maybe a tentative recovery," Rao said.

Online sales rose 17.7% in December and were likely aided by bad weather in the week before Christmas, which led some shoppers to buy from home, SpendingPulse said.

Electronics sales rose 7.3% and were up for the fourth consecutive month, but were down about 4% from December 2007.

Rao said electronics were "surprisingly strong", which may say "something about the appetite for discretionary spending".

Jewellery sales rose 6.9%, and were also up for the fourth month in a row. Within jewellery, mid-tier mall-based chains suffered, while lower and higher-end retailers remained strong, according to SpendingPulse. Excluding jewellery, luxury sales rose 5.5%.

Sales at specialty apparel retailers fell 1.8%, after dropping 5.7% in November, and 8.9% in December 2008. Specialty apparel sales were down almost 11% from December 2007, Rao said. Sales at department stores fell 2.3% from a year earlier. – Reuters