• David Gill

December disappoints general merchandisers

WASHINGTON -The U.S. Department of Commerce's retail sales report for December deepened the disappointment general merchandise retailers felt for the holiday season just past.

The Commerce Department pegged December department-store sales at $26.5 billion, 0.6 percent less than the November total for this category (which includes both department stores and mass merchants), which stood at nearly $26.7 billion. This year's total was 4.1 percent better than department-store sales from December 1999, which totaled $25.5 billion.

For retail as a whole, December sales edged up 0.1 percent, to $271.3 billion, up from $271.2 billion in November. This increase was urged on by a 0.3 percent rise in sales from automobile dealers, to $66.4 billion. December non-auto retail sales were virtually flat compared with November, at $204.9 billion.

Retail analysts were able to find some reasons to slow down any increasing feelings of negativity about the retail economy. David Orr, chief economist with First Union Economics Group, pointed out that the pickup for retail as a whole exceeded the analysts' forecasts for December, which actually called for a decline in sales from November.

However, Orr also admitted that "the data on many key sectors was lousy." He noted that December sales in furniture, home furnishings and appliance stores dropped 0.3 percent from their November level, and that those for eating and drinking places were off 0.4 percent.

In his evaluation of December retail sales, Michael Niemira, vp of the economic research department for the Bank of Tokyo-Mitsubishi Ltd., said sales were weakest at discounters, wholesale clubs, apparel specialty stores, department stores and furniture stores.

In its business cycle outlook, Bank One's corporate economic group said, "This week's retail sales report confirms the forecast that the consumer slowed, but did not collapse, in the fourth quarter."

In its study of the holiday sales results, the National Retail Federation was quick to caution against the view that the retail economy was under any serious threats as the economy slows down.

Noting all of the factors going against retailers during the holidays, NRF chief economist Rosalind Wells said the stores "posted respectable gains for the holiday sales period. While I expect economic growth to slow somewhat, retailers can rest easy knowing that the Federal Reserve is keeping a watchful eye and will step in to allow the economy to regain some footing."

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