Retail sales solid in final holiday stretch, up 3.4% in December

Wrapping up a good but not outstanding holiday season, the nation’s retailers reported a 3.4% year-over-year December sales increase, roughly in line with expectations.

Nearly two-thirds of retailers beat expectations, according to the tally of 22 major chains by Thomson Reuters released Thursday.

Among the month’s best performers were teen retail chain Zumiez Inc., which reported a sales bump of 10%, off-price retailer Ross Stores Inc., where sales rose 9%, and upscale department store Nordstrom Inc., up 8.7%. TJX Co., operator of TJ Maxx and Marshalls, also did well, with sales increasing 8%.

The last two months of the year are the most important time for retailers, with some making as much as 40% of their annual revenue during that time.

For the combined November-December period in 2011, retailers posted a 3.4% year-over-year increase, said Ken Perkins, president of research firm Retail Metrics Inc. That was down from the 4% year-over-year growth the industry reported after the 2010 holiday season, he said.

“Generally speaking, holiday 2011 has to be considered a modest success given the soft economic backdrop coupled with the highly promotional environment retailers are operating under,” Perkins said. “Consumers were the beneficiaries of great deals while retailers generated solid top line increases, albeit at the expense of margin.”

December’s weakest results came from San Francisco apparel giant Gap Inc., which reported a sales decline of 4%, missing expectations for a 1.3% drop. Teen chain Wet Seal Inc. saw sales decrease 3.7%.

Results are based on sales at stores open at least a year, known as same-store sales and considered an important measure of a retailer’s health because it excludes the effect of store openings and closings.

Retailers now are settling into the usual post-holidays lull, with many lowering prices even further to clear inventory and prepare for the next spike in consumer spending, typically before Easter.

“I’m pretty much buckling down the next couple of months, just getting over Christmas,” said Sandy Cunningham, 44, a healthcare consultant who was at Los Cerritos Center on Wednesday looking for a duffel bag for an upcoming family trip. “Like I just saw a shirt I really, really liked at Nordstrom but I didn’t buy it. I was smart.”