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US holiday Internet sales increase at slowest-ever pace

Internet sales by US retailers rose at the slowest pace on record as consumers grappled with US$3-a-gallon (3.8 liters) gasoline and the worst housing slump in 16 years.

Online spending from Nov. 1 through Dec. 27 increased 19 percent to almost US$28 billion from US$24 billion a year earlier, ComScore Inc said yesterday in a statement. Sales growth trailed last year's by 26 percent.

Shoppers withheld spending until after Christmas, seeking deeper discounts by Wal-Mart Stores Inc, the world's largest retailer, and Best Buy Co, the biggest US consumer electronics chain. Online sales the day after Christmas totaled US$545 million, more than double the revenue on the same day in 2006, ComScore said.

"Consumers went shopping for price," Kurt Barnard, president of Barnard's Retail Forecasting in Nutley, New Jersey, said yesterday in an interview. "They looked at the price tag before they looked at the product."

ComScore hasn't recorded online sales growth of less than 20 percent since it began reporting the figures in 2002. Wal-Mart, Best Buy and Circuit City Stores Inc offered discounts of 50 percent or more and promoted savings for in-store pickup of products purchased online to attract shoppers.

After-Christmas spending showed that consumers "were willing, and able, to take advantage of late-season promotions and price discounts," ComScore chairman Gian Fulgoni said in the statement.

Spending through Web sites, which makes up more than 3 percent of all retail sales, may climb to US$29.5 billion in November and last month, ComScore estimated. That's less than the 26 percent growth in online sales during the holidays in 2006.

Shoppers had an extra day this holiday season. There were 32 days between Thanksgiving and Christmas compared with 31 days a year earlier, ComScore said.

The slower growth mirrors the patterns in traditional retail sales. Last year's holiday shopping season's sales may increase at the slowest pace in five years as consumers tightened household budgets because of record high oil prices and declines in home values. Spending in November and last month may rise 4 percent this year, according to National Retail Federation estimates.

Sales of new homes in the US fell to a 12-year low in November, weaker than the lowest forecast in a Bloomberg News survey of economists.

The Friday report by the Commerce Department reinforces the deepest US housing recession in 16 years. The slump may worsen as discounts fail to lure buyers and mounting foreclosures swell the glut of unsold properties, economists said.
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