By  on January 17, 2006

WASHINGTON — Department stores, which are in a period of dramatic consolidation, registered a 1.5 percent decline in sales last month to $17.7 billion, or 2.3 percent less than the year-ago period, the Commerce Department reported.

Apparel and accessories stores registered sales of $17.2 billion, on par with November when adjusted for seasonal variations, and 7.1 percent ahead of a year ago.

"As the economy improves and overall consumer confidence improves, people shift to higher-end clothing, so they spend more in the specialty stores," said Brian Bethune, U.S. economist at Global Insight.

Sales figures for the stores offer only part of the consumer picture, though. Non-store retailers, selling apparel and other goods online and through catalogues, tallied sales of $22.8 billion, 0.5 percent more than in November and 10.6 percent more than a year ago.

"You're getting a lot of mail-order sales now...and online shopping is increasing at over 10 percent annually, so that channels are changing in terms of how people are buying and how goods are being distributed," Bethune said.

Sales at all retail and food service outlets rose 0.7 percent last month and were 6.4 percent ahead of December 2004.

Bethune said growth in consumer spending, propped up by a 10.5 percent increase in personal debt last year, would slow in the coming year.

"The consumer spent at a fairly heady pace in 2005," he said. "The consumer's kind of reevaluating."

The National Retail Federation was upbeat about December sales results, but also sounded a note of caution.

"This was clearly more than just a ho-hum holiday season, as some have prematurely reported," NRF chief economist Rosalind Wells said in a statement. "While 2005 ended on a very positive note, we certainly expect to see a more challenging sales environment in the New Year."

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