Holiday shopping season was not as merry as the retail industry expected

The Macy's Inc. logo outside a department store in New York in August. Macy’s said Thursday it will fire or relocate about 3,000 workers and explore options for its real estate after suffering a worse holiday period than it expected. Must credit: Bloomberg photo by Michael Nagle.

As retailers from Macy’s to Best Buy have reported gloomy holiday season sales results in recent days, evidence had been mounting that the retail industry did not have a strong showing in its most important two months of the year.

On Friday, came confirmation. The National Retail Federation said sales were up 3 percent to $626.14 billion this holiday season, sharply lower than the 3.7 percent sales increase the trade group had forecast. That figure excludes sales at gas stations and restaurants.

“Make no mistake about it, this was a tough holiday season for the industry,” said Matthew Shay, the NRF’s president, in a press release.

The industry struggled with a confluence of problems: Unseasonably warm weather gripped much of the country throughout December, a factor that many retailers have pointed to as a culprit for weak sales of goods such as coats, boots and gloves. Macy’s for example, said, 80 percent of its year-over-year sales decline was attributable to dismal performance in these categories. Meanwhile, some websites had trouble maintaining inventories of hot items such as the Hasbro Pie Face game or Star Wars toys, meaning they likely missed out on sales of those products.

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And with restaurant sales and travel spending going strong, it seems the retail industry is grappling with a deeper problem that will stick with them far beyond the holiday season: Consumers are increasingly choosing to spend their money on experiences instead of on a new purse or trendy pair of sneakers.

This pattern also could be seen in retail sales data that the Commerce Department published Friday, which showed that sales at restaurants were up 0.8 percent for the month of December, even as total retail sales fell 0.1 percent.

There were hints as the season was winding down that perhaps some retailers were struggling to sell their merchandise: Anthropologie, a chain that is usually relatively parsimonious with its promotions, doled out a “20 percent off your purchase” deal near the end of the season. Gap has been touting in its email promotions that some of its items are marked down by 75 percent.

Still, there were some bright spots in the mall and online. Victoria’s Secret saw sales jump a robust 8 percent, and JCPenney recorded a 3.9 percent increase in sales. While the growth in sales at JCPenney’s was not exactly gangbusters, it marks a clear improvement for a chain that many had considered on the brink of death only a few years ago. And while Amazon did not report how its sales shaped up this year, it did announce that it added 3 million new Prime members in the third week of December alone, an indication that it was successful in luring large numbers of customers. (Jeffrey P. Bezos, the chief executive of Amazon, owns The Washington Post.)

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The NRF reported that online sales grew 9 percent to $105 billion this holiday season.