December retail sales show signs of life

NEW YORK (AP) — Last-minute holiday shoppers brought relief to the nation's retailers, handing them modest sales gains for the season and prompting a number of chains to raise their fourth-quarter profit outlooks.

The improved profit picture comes because retailers never had to resort to drastic price-cutting after keeping inventories lean.

Still, the solid finish capped a year that saw the biggest decline in at least four decades, according to the International Council of Shopping Centers. Merchants saw sales fall every month but September, October and December.

And retailers may be facing chilly months ahead as consumer spending is expected to remain muted amid high unemployment and tight credit, though the slowdown in job losses may help.

"The holiday season was decent but nothing you can get excited about. And it was saved by a last-minute surge," said Ken Perkins, president of research firm RetailMetrics. "Santa didn't deliver coal, but he certainly didn't deliver caviar."

According to the International Council of Shopping Centers sales index, December sales rose 2.8 percent compared with a year ago, ending a year that averaged a 2 percent drop. For November and December combined, the index rose 1.8 percent, better than its estimate for a 1 percent gain. That figure, however compares with a 5.8 percent drop a year ago, the biggest holiday sales decline in least four decades.

The December reading was the strongest for 2009 and the most robust since April 2008, when stores collectively had a 3.3 percent gain, according to the ICSC.