US - General Retail Sales: Happy Holiday Season, Hopeful 2010

Report from Shelf Awareness

In December, general retail sales exceeded expectations, rising 2.9% compared to the same month in 2008, according to Thomson Reuters, and several retailers raised their earnings forecasts "after reporting healthy December sales gains, the fourth month in a row of year-over-year sales increases," the Wall Street Journal reported.

"It's a story of the turning of the corner for the retail industry. We are probably now outside of the recession, and getting the first slow recovery," said Michael Niemira, chief economist for the International Council of Shopping Centers, which projected that "annual sales will increase 3% to 3.5%, the biggest jump since 2006," the Journal wrote.

The New York Times reported that "retailers, by keeping tight control over their inventories, were able to avoid deep discounting. And many consumers finally surrendered, buying what they needed in a last-minute sales surge right before Christmas... some 75% of retailers beat analysts’ estimates--the most companies to do so since March, 2007."

"The consumer blinked first," said Bill Dreher, a senior research analyst with Deutsche Bank Securities.

"The window shoppers are turning into spenders," Jharonne Martis, director of consumer research for Thomson Reuters, added while also offering a note of caution: "Until the unemployment number heals, we’re not going to see consumers come back. That is the one economic indicator that all consumers understand."