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Holiday sales fall 5.5% to 8%

The sluggish economy and bad weather damp retailers' revenue, preliminary data show.

December 26, 2008|Associated Press

NEW YORK — It's official: This was a rotten holiday season for retailers.

A weak economy and strong winter storms brought retail sales down 5.5% to 8% from a year ago, according to preliminary data from SpendingPulse.

Many economists had predicted this would be the worst holiday season in decades as home prices plunged, unemployment rose and nervous consumers cut costs. Compounding retailers' problems were unexpected winter storms that snowed in would-be shoppers in places such as Seattle, Las Vegas and Boston.

When gas and auto sales are excluded from the holiday period from Nov. 1 to Wednesday, overall sales were down 2% to 4%, according to SpendingPulse, a division of MasterCard Advisors that tracks sales paid by credit card, checks and cash.

During the holiday season, gasoline prices were down 40% from a year before.

A separate measure of holiday spending, from the International Council of Shopping Centers, is expected to fall 1.5% to 2% from last year, making this the worst season since 1969. A full picture of the season won't be known until Jan. 8, when major retailers report their sales results.

Food sales were strong, while clothing sales -- especially the most expensive clothing -- were dismal, SpendingPulse said.

Sales of women's clothing dropped 22.7%, according to SpendingPulse. Men's clothing sales dropped 14.3%, and footwear sales fell 13.5%.

Sales of electronics and appliances were down 26.7%, leaving electronics retailers more rattled than other merchants.

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