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Retailers have year to forget
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January 14, 1998: 9:13 a.m. ET
Retail spending last year rose 4.2 percent in weakest showing since 1991
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NEW YORK (CNNfn) - Christmas sales proved to be disappointing for retailers, and only automobile dealers can look back fondly on the holiday season, figures released by the U.S. Commerce Department Wednesday indicate.
Retail sales in December rose a slight 0.7 percent to a seasonally adjusted $215.6 billion, Commerce said, less than economists' forecasts of a 1 percent increase for the month, typically retailers' strongest.
The picture becomes even drearier when automobile sales, which revved up 2.3 percent in December, are taken out. Retail sales excluding autos were up just 0.2 percent. Cars account for about one-fourth of all retail business in the United States.
Steve Kernkraut, retail analyst at Bear Stearns, thinks the holiday season was better than the government figures indicated, though.
"What really occurred is that department stores, the big retailers, had relatively disappointing Christmases, but a lot of the specialty stores had fabulous Christmases," he said.
"I really wouldn't be too concerned about those numbers at all."
Overall retail sales for 1997 increased 4.2 percent from 1996 to $2.5 trillion. However, that gain was smaller than the 5.2 percent increase registered for 1996 and was the smallest rise in six years.
Percent change in retail sales
from 1996 to 1997
(seasonally adjusted)
source: U.S. Commerce Dept.
Sales of durable goods - items expected to last three years or longer -- rose 1.9 percent in December to $89.4 billion while non-durables sales dropped off 0.1 percent to $126.3 billion.
Sluggish retail sales are a concern for not only the retail sector but investors as well since such spending accounts for about one-third of the nation's economy.
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