US retail sales down in December

By: Leonie Barrie - 19 January 2009 15:58

Official figures published last week show US retail sales fell by more than expected in December as shoppers cut back on spending over the holiday shopping period. Total sales fell by 2.7% last month the Commerce Department said. Sales fell by 2.3% at department stores, while clothing and accessories sales dropped 2.5% and are now 7.1% below the level seen a year ago.

After the December figures had been released, a string of major US retailers reported disappointing sales figures and cut their profit forecasts. Kenneth Cole, Neiman Marcus, Charming Shoppes and Saks also announced job losses in a bid to slash costs. The results will come as a spur to President-elect Barack Obama, who wants to push an $800bn economic stimulus package through Congress in the next few weeks.

UK retail sales also saw their worst performance since figures were first compiled 14 years ago, with like-for-like sales down 3.3% year-on-year in December. Total retail sales fell 1.4% - also the worst ever December performance - according to the British Retail Consortium figures. Footwear sales were fuelled by heavy discounting, while clothing fell further below year-earlier levels.

Among the winners, children's wear retailer Mothercare saw total third quarter sales rise 4.2% helped by growth at its international stores; home shopping specialist N Brown Group posted an 8.8% jump in Christmas trade; and growth in non-food lines like clothing helped Tesco to like-for-like sales growth of 2.5% over the festive period.

UK discount fashion chain Primark was another winner on the sales front, with revenues up 18% in its first quarter. But this stellar performance was overshadowed by accusations of illegal labour practices at one of its suppliers in the UK which passed two independent audits last year.

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