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December Sales Plunge In Weak Holiday Season

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By ANNE D'INNOCENZIO

The Associated Press

Published: January 9, 2009

NEW YORK - Retailers reported dismal sales figures for December on Thursday as even Wal-Mart Stores, one of the bright spots in the industry, finally buckled under the pressures of the deteriorating economy.

As the figures confirmed fears that the holiday season was the weakest since at least 1969, the malaise cut through practically all areas, from kitchen gadget stores to jewelry purveyors and teen apparel retailers.

The deep discounts that began well before the official start of the holiday season spurred a number of merchants to cut their earnings outlooks, fueling more concerns about the health of the industry.

Among the retailers that reported steep sales declines were Sears Holdings Corp., which operates Kmart and Sears stores, luxury retailer Saks and Gap. But the biggest surprise came from Wal-Mart, the world's largest retailer, which posted a smaller sales gain than expected and cut its fourth-quarter earnings outlook.

"This suggests that the lower income group is feeling the pinch more than we thought and this is clearly reflected in the lower-than-expected numbers at Wal-Mart," said Ken Perkins, president of research company RetailMetrics LLC. "I think it says the economy is in more dire straits than we thought."

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