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Posted at 10:58 AM ET, 01/12/2012

December retail sales mostly flat, with e-commerce a standout

Retail trade remained flat in December from the previous month, according to data from the Commerce Department released Thursday.

The data add to an already mixed picture about the retail sector, suggesting a gradual migration of consumers during the holidays from brick-and-mortar stores to online shopping.

Overall holiday sales, boltered by aggressive discounting, were up — but not as much as last year.

Not-seasonally-adjusted retail sales for November and December rose 4.1 percent from last year, according to financial forecaster IHS Global Insight. In 2010, holiday retail sales rose 5.2 percent after having declined for two years.

E-commerce sales were the big winner, rising 13 percent from 2010 and hitting $60 billion last quarter, according to IHS.

“The new game in town is e-commerce retail sales,” the company wrote in a statement.

“There are several factors at play here,”said IHS economist Chris Christopher. “More stores are offering e-commerce, and more people are getting used to buying online.”

Currently, e-commerce makes up a bit less than 5 percent of holiday retail sales, but 10 years ago, it was 1 percent, Christopher said.

Howard Davidowitz, chair of the consulting and investment banking firm Davidowitz & Associates, said the flat retail growth in December underscores department stores’ weak sales of late. Late last month, Sears and K-Mart reported store closures because of disappointing holiday sales.

“When you look at the numbers, they’re pretty sad,” Davidowitz said. “The Gap is in the tank. Kohl’s is lousy. Cato is down 1,300 stores. The American consumer is a train wreck.”

He agreed that e-commerce seemed to be the sole bright spot.

“Clearly e-commerce and mobile is big,” he said. “It’s going bananas, and will continue to.”

The holiday increase that did occur was bolstered by promotions like Black Friday and Small Business Saturday, said Ken Harris, chief executive of Kantar Retail Americas Consulting.

“Shopping during the first few days after Thanksgiving made a big difference,” he said.

American Express created Small Business Saturday in 2010 and gave promotions to consumers who shopped at small businesses on the day after Black Friday. According to American Express, small businesses experienced a 23 percent increase in card-member transactions on the day, compared with the same day in 2010. Sales at private retailers — who are mostly small businesses — increased 5.8 percent in 2011 overall, the largest increase in five years, according to Sageworks, a financial information company.

However, analysts said the picture for small business retailers is far from rosy, even though the NFIB’s small business optimism index has been inching up for months.

“Small retailers are struggling,” Christopher said, pointing out that the optimism index is a “mishmash of different types of firms,” so it doesn’t accurately represent how things are going for retailers specifically.

“It’s a fight for market share, and some are making it, and some are having a hard time.”

By  |  10:58 AM ET, 01/12/2012

 
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