NRF: 2007 Holiday Sales Up 3%

Retail industry sales for December (which exclude automobiles, gas stations, and restaurants) rose 1.7 percent unadjusted over last year and decreased 0.4 percent seasonally adjusted from November, according to the National Retail Federation. In addition, November retail industry sales were revised downward to 4.7 percent growth from the initial 5.1 percent that was reported last month.
As a result, 2007 holiday sales, which combine November and December sales, rose three percent to $469.9 billion, weaker than NRF’s projected four percent holiday forecast. This represents the lowest holiday season growth since 2002, when sales rose 1.3 percent.
“Economic pressures caused deterioration in the sales climate at the end of the year,” said NRF chief economist Rosalind Wells. “Because holiday sales were disappointing, retailers will have to quickly adapt with pricing strategies and promotions that will encourage consumers to spend.”
December retail sales released today by the U.S. Commerce Department show total retail sales (which include non-general merchandise categories such as autos, gasoline stations and restaurants) dipped 0.4 percent seasonally adjusted from last month and rose 3.2 percent unadjusted year-over-year.
Seasonal bright spots were seen by health and personal care stores where unadjusted sales grew 3.7 percent year-over-year and 0.7 percent seasonally adjusted from November. General merchandise stores also saw small gains, with sales increasing 2.1 percent year-over-year and 0.3 percent from the previous month. Weakness was seen by clothing and clothing accessories stores, furniture and home furnishings stores, and department stores.
NRF is forecasting that

retail industry sales will increase 3.5 percent in 2008

.