RetailSails

Retailers ended the year on a high note, as bargain-hunting shoppers drove strong sales in the last week of 2009. Most analysts initially predicted holiday sales of flat to slightly up compared to the plunge last holiday season, but based on early results we expect the final tally will show a year-over-year holiday gain of 1-2%.

Unseasonably cold and wintry weather didn’t keep shoppers from the stores, as holiday gift card redemptions drove strong sales in the post-Christmas week, according to ICSC Research. The company said sales for the week ending January 2nd rose 2.5% compared to a year ago, while week-over-week sales increased 1.5%, the strongest gain since late June. Preliminary results show December sales were up 2.5% from a year ago, and ICSC reaffirmed its forecast for a holiday season (November-December) gain of 1%.

Traffic counts remained relatively high as consumers were drawn to stores to exchange and return gifts, redeem gift cards and hunt for bargains. Redbook Research reported that same-store sales rose 1.6% in the final week of December, while month-to-date comps were up 1.8% compared to a year ago. The increase came as consumers snapped up clearance sales of seasonal inventories as they visited stores to return unwanted holiday gifts. Redbook expects sales for January to be up about 1.5%.

Retailers came into this holiday season much better prepared than last year, with lean inventories and staffing levels, and results so far have been relatively encouraging. However, only a small gain compared to last year when sales fell the most on record can hardly be called a recovery. We will get a more clear picture of holiday results when individual retailers report monthly same-store sales results on Thursday.