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A gift for nation's stores: Holiday sales gain

By Parija Kavilanz, senior writer


NEW YORK (CNNMoney.com) -- The nation's merchants scored a surprising increase in their crucial year-end holiday sales, countering expectations of a decline, according to an industry report issued Thursday.

Sales in the combined November-December period rose 1.1% to $446.8 billion, according to the National Retail Federation (NRF).

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The group had forecast a decline of 1% for the period, which would have followed a 3.4% drop in holiday sales in 2008.

"With an eye on managing inventory and maintaining lower price points, retailers did a tremendous job of planning for the holiday season," NRF chief economist Rosalind Wells said in a statement.

However, the retail group maintained a tone of caution about the spending environment in 2010.

"While the consumer appears to be spending again, double-digit unemployment numbers will remain an impediment to maintaining this momentum," Wells said.

The year-end sales period is critical for the sellers because those two months can account for 50% or more of their sales and profits for the full year.

The NRF report, which covers the two months of the holiday period, followed a somewhat disappointing government report Thursday that showed a surprising decline in overall retail sales in December. The November sales figures were revised higher, to a gain of 1.8%.

Some industry watchers said both reports indicated a modest pick-up in consumer spending.

Further, the unexpected decline in December retail sales could be revised next month to eventually show a gain, said Michael Niemira, chief economist with the International Council of Shopping Centers (ICSC).

Niemira said he's hopeful that will happen given that a number of large retail chain reported much better December sales earlier this month.

"The takeaway from the holiday sales [result] is that an economic recovery is picking up steam, but it remains choppy," Niemira said. To top of page

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