Half-hearted consumers leave weak holiday sales

By Don Hogsett -- Home Textiles Today, 1/19/2004 12:00:00 AM

WASHINGTON —

Santa came late and left the party early this year, leaving December retail sales weaker than expected and eking out a slender 0.5 percent gain, roughly half the 0.9 percent increase economists had been looking for.

The December increase was less than half of the revised 1.2 percent gain recorded in November.

Even worse, once a strong 1.6 percent surge in car sales is pulled out of the equation, retail sales limped ahead by just 0.1 percent, to a seasonally adjusted $246.3 billion, the U.S. Commerce Department reported.

It was especially tough luck for brick and mortar retailers as increasing numbers of consumers logged on to the Internet to order their Christmas presents. The single biggest channel during December was non-store retailing, where sales jumped by 2.1 percent, to a seasonally adjusted $17.1 billion from $16.7 billion last year.

Despite the broad-based weakness, gainers still outnumbered decliners during the month, by a margin of 11 to three, the agency reported.

The strongest home goods channel during the holiday period was, not surprisingly, electronics, as consumers shopped for ultra-thin TVs, digital cameras and low-price DVD players. Sales in building material and garden equipment centers also posted a healthy gain, moving up by 0.3 percent.

But sales in furniture and home furnishings stores barely budged, remaining virtually unchanged during December.

Retail sales in December (by channel)