Retail group reports strong holiday sales

Strong holiday sales buoyed retailers and analysts' hopes for a continuing economic recovery, but many said they are both upbeat and guarded about retail predictions for this year.

November and December retail sales, excluding automobiles, gas stations and restaurants, rose 5.7 percent from the previous year to $462 billion, the best holiday sales gain since 2004, when sales rose 5.9 percent, the National Retail Federation said Friday. The 5.7 percent sales boost exceeded the trade group's forecast of 3.3 percent.

"I think the number is really strong and I think that most retailers should be tickled pink, because I think it shows we're starting to see signs that we are going into recovery," said Barry Berman, a Hofstra University business professor. ". . . But there is this cautious consumer who is seeking out value."

Fourth-quarter consumer confidence increased 1.6 points to 67.7 on Long Island, according to the Siena Research Institute.

Local retailers said shoppers still were driven by sales, affordable pricing and the early arrival of cold weather.

"It got colder earlier in November, which prompted the sales of sweaters, coats, hats and scarves," said Julie Marchesella, first vice president of the Nassau Council of Chambers of Commerce and owner of Queen of Hearts Inc., a Merrick boutique.

Christina Essabba, owner of apparel and accessories retailer Milk & Honey, was elated with the 19 percent sales increase in November and December. The shop's Rockville Centre and Huntington locations saw healthy apparel sales, but jewelry sales were the strongest, she said.

"Our customers were not only looking for unique and affordable selections, they were looking for sales as well, so we catered to that," Essabba said.

Though sales were up nationally, the profit margins of those sales won't be known until many public retail companies begin filing 2010 year-end reports, said Jeffrey A. Wurst, a senior partner and chair of the financial services, banking and bankruptcy department at the Ruskin Moscou Faltischek law firm in Uniondale. The retail sector is inching back but still hasn't made up for losses in 2008 and 2009, he said.

"Although Long Island is faring better than the rest of the country, you can't help but notice those empty stores as you're driving down Main Street," said Wurst, who is a board member of the Long Island Chapter of the Turnaround Management Association, a nonprofit trade group.

Still, the holiday sales numbers are impressive and probably put some retailers in a strong position for 2011, said Stewart Cohen, managing director and principal head of strategic planning at Boston-based consulting firm Gordon Brothers Group.

"The economy is bouncing back and people . . . have more confidence in spending because they're not loading up their credit cards as much," he said. "And retailers are continuing to do a great job managing inventory and staying in stock on things people want because of a much better supply chain."