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Report: Retail sales drop for December, year

Shoppers walk around Tanger Outlets at the Arches

Shoppers walk around Tanger Outlets at the Arches in Deer Park. (December 12, 2009) Photo Credit: John Dunn

Retail sales fell in December and dropped steeply for the year, as consumers' wallets continued to be hit by unemployment, pay cuts and declining home prices.

Some analysts had predicted a rosier December, but the Commerce Department Thursday reported a 0.3 percent decline, compared with November. It said sales for the entire year plummeted 6.2 percent, the biggest decline since records started in 1992.

"Unemployment is 10 percent and will continue to grow, home repossessions are growing like mad, consumer bankruptcies are growing like mad, food stamps are growing like mad. . . . more people are being pushed into part-time work and consumers' biggest asset - their home - continues to shrink in value," said Howard Davidowitz, chairman of the Davidowitz & Associates retail consulting and investment banking firm in Manhattan. "How is anything going to be good?"

Among the few sectors showing a yearly gain were health and personal care stores - consisting mainly of pharmacies and drugstores - where sales rose 3.3 percent.

Distribution of influenza vaccinations was a contributing factor, said Chrissy Kopple, spokeswoman for the National Association of Chain Drug Stores. But rising drug prices and many consumers' basic need for medication were likely factors, said Vincent Terranova, owner of Northport's Jones Drug Store. Though Terranova said he had disappointing holiday sales for gift items, he expects his overall 2009 sales to be above the prior year.

Automobile and other motor vehicle dealers saw some of the worst yearly declines in the government's report, slipping 13.4 percent.

Despite a rough 2009, Mark Calisi, owner of the Eagle Auto Mall in Riverhead, said he has already seen some green shoots, especially for General Motors' lineup. He has a nine-page request list for the 2011 Chevy Cruze small sedan, and dealers across the country have waiting lists for one-third of GM's lineup.

"The sales trend is moving in a positive direction in comparison to last year," said Calisi, who also sells Mazdas and Volvos.

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