US holiday sales up 3.5-4% on strong online buying

Shoppers waiting for a Macy's store in in New York to open on  Nov. 27, 2014, the day before Black Friday. Scattered spending and early discounts led to a slow start to the holiday season, which coupled with a weak Black Friday weekend, resulted
Shoppers waiting for a Macy's store in in New York to open on  Nov. 27, 2014, the day before Black Friday. Scattered spending and early discounts led to a slow start to the holiday season, which coupled with a weak Black Friday weekend, resulted in muted November sales for retailers. -- PHOTO: REUTERS

CHICAGO - US retail store sales fell 8 per cent during the 2014 holiday season despite a late shopping surge, but overall holiday sales should show a 3.5 to 4 per cent rise from a year ago because of stronger online buying, analytics company Retail Next said on Wednesday.

In another sign of disappointing Christmas sales for brick-and-mortar retailers, RetailNext said foot traffic dropped 8.3 per cent during November and December versus a year ago at the specialty stores and large retailers it tracks. However, customers who did visit stores spent slightly more on average than a year earlier.

"The online promotions that came out early in November really took a lot out of the brick-and-mortar business as they captured the shopper very early this year," said Ms Shelley Kohan, vice-president of retail consulting at RetailNext.

Ms Kohan expects overall holiday sales to have ended 3.5 to 4 per cent higher in 2014, aided by higher online sales. Online holiday sales rose 13.9 per cent over the same period a year ago, according to IBM Digital Analytics. Retail sales on mobile phones accounted for 22.6 per cent of all online sales, an increase of 27.2 percent year over year.

Scattered spending and early discounts led to a slow start to the season, which coupled with a weak Black Friday weekend, resulted in muted November sales for retailers with physical stores.

The Saturday before Christmas, nicknamed "Super Saturday" in the retail industry, failed to make up for spotty earlier performance. But deeper discounts, plummeting gas prices and a long weekend after Christmas sparked a jump in spending in the final stretch of December, Kohan said.

A Reuters/Ipsos poll found an increase in the percentage of consumers willing to spend their savings at the pump in the last week of December when the average price per gallon fell to near or below US$2 a gallon in several states.

The National Retail Federation (NRF), the leading industry trade body, has forecast a 4.1 per cent rise in holiday sales this year, including online and store sales. The NRF is hoping to meet its expectations amid falling petrol prices, lower US unemployment and consumer spending that showed signs of a revival in late December.

NRF will release final holiday sales numbers on Jan 14.