December sales tank as retailers take 6th hit in a row
1/15/2009WASHINGTON - Retail sales plunged far more than expected in December, ending a dismal holiday season with a record sixth straight monthly decline, and there's no relief in sight as consumer demand remains weak.
The Commerce Department reported yesterday that retail sales dropped 2.7 percent last month, more than double the 1.2 percent decline that Wall Street expected.
The December sales drop, which followed a November revision downward to 2.1 percent, confirmed private-sector reports that retailers had suffered the worst holiday season since at least 1969. For the entire year, retail sales were down 0.1 percent, a sharp turnaround after a 4.1 percent gain in 2007. It was the first time the annual retail sales figure has fallen on government records going back to 1992.
Analysts predict the recession - already the longest in a quarter-century - will continue until the second half of this year.
In a separate report, the Commerce Department said businesses cut their inventories by 0.7 percent in November, the largest decline in seven years and the third straight month that stockpiles were reduced as companies scramble to cope with huge declines in sales. Total business sales fell by a record 5.1 percent in November, the government said.
Also yesterday, regional department store chain Gottschalks Inc. put itself up for sale and said it had filed to reorganize in a Chapter 11 bankruptcy.
Elsewhere, luxury department store retailer Neiman Marcus Group Inc. on Tuesday said it was cutting about 375 jobs.