Holiday sales fall short of estimates

NEW YORK (CNNMoney.com) -- Despite the cutthroat price wars on electronics, toys and clothing, the National Retail Federation said Friday that total sales for the November-December holiday sales season grew only "modestly," coming in below its forecasts.

According to the trade group, holiday sales for the two months combined rose 4.4 percent to $454.76 billion, short of its forecast for a 5 percent increase. The NRF blames the shortfall on the warmer-than-usual temperatures that decimated sales of winter apparel and other seasonal merchandise.

Indeed, some of the retail casualties included women's clothing seller Ann Taylor (Charts), whose sales at its stores open at least a year - key retail measure known as same-store sales - tumbles 5.3 percent in December.

No. 1 apparel merchant Gap Inc. (Charts) posted a steep 8 percent drop in its same-store sales last month.

"Unseasonably warmer weather and the slower housing market had a clear impact on consumer spending," NRF's chief economist, Rosalind Wells, said in a statement.

Further, Wells said the group expects "subdued gains to continue into the first half of 2007."

The group is expected to release its 2007 economic forecast next Tuesday.

Shoppers splurged in December

Retail execs face the chopping block

Mild weather melts profits at clothing sellers