January 9, 2015 / 1:15 AM / 5 years ago

U.S. holiday season beats expectations on late shopping surge

CHICAGO (Reuters) - A spending boost from plunging gas prices in the final stretch of December and stronger online buying led to a better-than-expected finish to a holiday shopping season that had been marked by steep discounts and scattered spending over the two-month period.

Shoppers browse at Marbles: The Brain Store within The Court, King of Prussia Mall, United State's largest retail shopping space, in King of Prussia, Pennsylvania in this file photo taken December 6, 2014. REUTERS/Mark Makela/Files

ShopperTrak, which monitors the number of people walking into stores across the United States, said on Thursday store holiday sales rose 4.6 percent, beating their 3.8 percent estimate.

Retail-oriented private equity fund Customer Growth Partners said stores and online sales rose 3.9 percent, outpacing their estimate of 3.5 percent. On Wednesday, analytics firm RetailNext said it saw an 8 percent drop in store sales but expects store and online sales combined to rise 3.5-4 percent.

Despite wild swings in store sales from ShopperTrak and RetailNext, there is growing evidence that the season finished on a stronger note for U.S. retailers.

“We saw a little lull coming out of Thanksgiving but when Hanukkah began, we saw December heating up,” said Bill Martin, founder of ShopperTrak. “Then there was a very strong weekend after Christmas and it ran pretty hot for retailers with customers returning with gift cards.”

A weak Black Friday weekend and slow Super Saturday, the weekend before Christmas, resulted in sluggish sales in November and early December.

Highly discounted categories like consumer electronics and home improvement ended the season stronger. Apparel, which had a weak start, picked up in December, industry officials said.

U.S. teen apparel retailers American Eagle Outfitters Inc (AEO.N) and Aeropostale Inc ARO.N said business in the holiday shopping quarter was better than expected.

Craig Johnson, president of Customer Growth Partners, said same-store-sales for most were down between 1 to 10 percent, but the majority of traditional retailers with e-commerce operations include online sales.

“When you add in online sales on a comp basis, that pulls most retailers into a flat to slightly positive zone,” he said.

JC Penney Company Inc (JCP.N) after reporting holiday sales growth of 3.7 percent said it would close roughly 40 stores in 2015 as part of its annual culling of underperforming locations.

Meanwhile, Family Dollar FDO.N, whose same-store-sales fell 0.4 percent in the first quarter ended Nov. 29, said on Thursday it shut 377 stores in 2014.

For some experts, though, the final performance will depend on how much money retailers made.

“I believe the real story for this holiday season is ... (that) retailers will have challenging profitability,” said Steven Barr, U.S. retail and consumer leader at PwC.

Additional reporting by Nathan Layne; Editing by Diane Craft

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