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Retailers get a modest gift this holiday season

Sales rise 3.6% from last year's dismal pre-Christmas period, and online spending jumps a robust 15.5%, SpendingPulse data show.

December 28, 2009|By Andrea Chang and Alejandro Lazo
  • A jewelry store on New York's Fifth Avenue advertises an after-Christmas discount. Sales of high- and low-end jewelry were markedly strong this holiday season, SpendingPulse said.
A jewelry store on New York's Fifth Avenue advertises an after-Christmas… (David Goldman / Getty Images )

After a holiday season marked by uncertainty and discounts, early sales figures coming out of the nation's malls, big-box stores and supermarkets showed improvement in a range of retail categories.

Total retail sales from Nov. 1 to Dec. 24 improved 3.6% from the same period a year earlier, according to data released Sunday by SpendingPulse, an information service of MasterCard Advisors. That figure includes traditional holiday-shopping destinations such as apparel and electronics chains as well as outlets such as grocery stores, furniture sellers and drugstores.

But industry watchers warned that the results didn't point to a strong industry turnaround or the return of free-spending shoppers. The sales gains over 2008 were generally moderate. And last year's holiday figures were so dismal, analysts said, that 2009 had almost nowhere to go but up.

"I see it as a cautious return to spending," said Kamalesh Rao, director of economic research at SpendingPulse, which estimates sales for all forms of payment, including cash, checks and credit cards. "There wasn't a huge resurgence. Even though we're seeing some growth in terms of the holiday season, we're still shy of the levels we saw from a couple years ago."

Although signs are emerging that the U.S. economy is improving, many Americans are keeping a lid on their spending because of tight credit, deflated housing values and a weak labor market.

"I've definitely been shopping at a lot of secondhand stores and shopping the sales," said Meredith Petro, 22, a technical designer at a garment manufacturer in downtown Los Angeles. "Everyone I know is just trying to be as conservative as possible because you just never know what's going to happen."

The Internet was the big winner this holiday season, with online sales rising a hefty 15.5% during the Nov. 1-Dec. 24 period.

The strong performance was spurred by consumers' increasing comfort with online shopping and an abundance of free-shipping offers and discounts, analysts said.

"Online is picking up in popularity," said Brent Schoenbaum, a retail partner at Deloitte & Touche. "People are using it as a tool to research products as well as find competitive pricing. It's more convenient; it's more readily available."

Several other categories also posted gains.

Electronics sales rose 5.9%, helped by a strong November and a spike in sales the week before Christmas Eve, SpendingPulse said. Footwear sales increased 5% and men's apparel was up 3.9%.

Weaker sectors included specialty apparel, whose sales declined 0.4%, and women's apparel, down 0.3%.

Jewelry sales posted a surprising 5.6% increase, with "marked strength" at both the high and low ends of the category, according to SpendingPulse. The luxury sector excluding jewelry finished with only a 0.8% increase.

Total dollar sales figures were not provided by SpendingPulse.

The figures were released as another wave of shoppers hit the malls this weekend for post-Christmas door-busters and specials.

To attract customers, retailers again pulled out all the stops: Toys R Us advertised buy-one-get-one-half-off deals, Macy's offered morning specials and extra coupons, and JCPenney touted its "biggest after-Christmas sale!" with markdowns of as much as 70%.

Crowds packed Southland shopping centers, with many people redeeming gift cards and exchanging presents.

Laden with bags of items to return at the Glendale Galleria, Brynn Barge said she was shopping as a way to unwind after three holiday parties.

"This is the way I treat myself," the 46-year-old from La CaƱada Flintridge said while browsing at Nordstrom. "It is my therapy."

But with the holidays over, retailers could have trouble enticing shoppers to open their wallets again.

"It'll be interesting to see how January goes because one thing we've seen is consumers will shop when there's a reason to shop, like Christmas or back-to-school, and then there's a lull," said Liz Dunn, an analyst at Thomas Weisel Partners.

Even though she went to the Burbank Town Center with family members to shop and catch a movie, Kari Jorgensen, 41, said she was watching her budget and planned to spend frugally well into 2010.

"In the past we shopped just as hard after Christmas as before Christmas," she said. "But not this year."

Major chain stores will report their December sales data Jan. 7.

andrea.chang@latimes.com

alejandro.lazo@latimes.com

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