Healthy holiday shopping season, but trouble could lie ahead, NRF says

NEW YORK — Despite caution among consumers, retailers wrapped up 2012 with a healthy holiday shopping season, according to a new report by a retailing trade group.

The National Retail Federation said Tuesday that holiday retail sales increased 3% over the year before, to $579.8 billion. December retail sales increased 0.8% seasonally adjusted from November and 2.1% unadjusted year over year. Nevertheless, the 3% increase was still below the NRF's projected 4.1% growth. Meanwhile, nonstore holiday sales grew 11.1%.

"For over six months, we've been saying that the fiscal cliff and economic uncertainty could impact holiday sales," NRF president and CEO Matthew Shay said. "As the number shows, these issues had a visible impact on consumer spending this holiday season. We can't expect consumers to continue to carry the burden of growing our economy — Washington must put political differences aside and do what it takes to get our country growing again and Americans back to work."

But retail sales growth is "highly unsustainable" due to tax-related pressure on income, spending and weather-related issues in the next few months, Guggenheim Securities analyst John Heinbockel wrote.

December retail sales figures released by the Department of Commerce — which showed total retail and food services sales but excluded products like automobiles, restaurants and gas stations — showed a 0.5% seasonally adjusted increase and a 4.7% year-over-year adjusted increase. General merchandise stores' seasonally adjusted sales were unchanged month to month and decreased unadjusted 3.4% year over year, while health and personal care stores' seasonally adjusted month-to-month sales increased 1.4% as unadjusted year-to-year sales decreased 0.7%.

"While nonstore retailers increased a hearty 11% this December, total December sales could not make up for shortfalls in certain categories like electronics," NRF chief economist Jack Kleinhenz said. "Heading into 2013, consumers could continue to think twice about their discretionary purchases as they face decreases in their paychecks and other concerns with their household budgets."