Chain-store sales fall on economy, weather

Holiday season worst since 1970

By Danny King -- Video Business, 12/30/2008

DEC. 30 | Revenue at U.S. chain retail stores last week fell 1.8% from a year earlier, helping to plunge this year's holiday season sales to their worst in almost four decades, the International Council of Shopping Centers said in a report today.

In addition to the drop for the week ended Dec. 27, U.S. chain-store sales also fell the previous two weeks and only showed a 0.4% uptick for the week ended Dec. 6, the trade group said, citing the ICSC-Goldman Sachs Chain Store Sales Index. ICSC had forecast 2008 holiday sales to fall between 1.5% and 2% from a year earlier.

Weather was a contributing factor to the lower sales. Last week, metropolitan areas received almost 80% snowfall than they did a year earlier, and snowfall was more than double the week's average, ICSC said.

Still, online holiday spending, forecast to be about even with last year, fell about 1% as retailers discounted items in order to move inventory, according to ComScore.

"The 2008 recession, widespread heavy discounting and adverse pre-holiday weather all coalesced to produce the weakest holiday season since at least 1970," said Michael P. Niemira, ICSC’s chief economist and director of research, in a statement today.

U.S. online retail spending has been falling as a decline in demand for consumer electronics, DVDs and CDs more than offset an increase in videogame sales over the Internet, ComScore said in a report last week. Overall holiday spending also trails year-earlier figures because of fewer days between Thanksgiving Day and Christmas.

The ICSC report released today didn't break out retail categories.