Department stores took a big hit this holiday season

US retail sales disappoint at end of the year

Spending rose 4 percent to $658.3 billion during November and December, beating a 3.6 percent projection, the trade group said Friday. Over the month, department store sales fell 0.6 percent from November.

Total retail and food service sales for December rose 4.1 percent year-over-year to $469.1 billion.

According to Adobe, which tracks online sales, the two holiday shopping months brought in $91.7 billion, an 11 percent jump from the previous year's. Sporting goods, hobby, book and music stores, which suffered a drop of a full 1 percent in sales in November, eked out a gain of 0.2 percent in December, but were still down 3.6 percent for the year.

Energy prices rose 2.6 percent from the prior month, as gasoline jumped 7.8 percent, accounting for nearly half of the December rise in goods prices.

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The Fed raised its benchmark overnight interest rate last month by 25 basis points to a range of 0.50 percent to 0.75 percent. The NRF reported that "non-store sales", which include online and catalogue purchases, were up 12.6 percent compared with 2015. "And while there might have been some bumps in the road for individual companies, the retail industry overall had a solid holiday season and retailers will work to sustain this in the year ahead".

According to the bureau, nonstore retailers (Internet sales) continued their relentless increase.

The holiday season was not kind to department stores.

Electronics and appliance store sales were off 2.4% in December from a year ago and down. Food costs showed a 0.7 percent increase, the most since last January. Those results were a sharp contrast to what was seen at home furnishings, personal care and clothing stores, where consumers stepped up their spending. And Americans' paychecks are getting fatter: Average hourly pay rose 2.9 percent in December from a year earlier, the most in seven years.

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