US specialty chains see dismal December-SpendingPulse

By Martinne Geller

NEW YORK, Jan 7 (Reuters) - U.S. retailers experienced a dismal December, as a year-long recession and winter storms kept many potential shoppers at home, according to data released on Wednesday by SpendingPulse.

The figures, from the retail data service of MasterCard Advisors, offer an early indication of the weakness of December same-store sales, which most chains, including Wal-Mart Stores Inc (WMT.N), J.C. Penney Co Inc (JCP.N) and Gap Inc (GPS.N) will report on Thursday morning.

Analysts are bracing for potential profit warnings from retailers, who will finally give their own assessments of the critical holiday shopping season after other forecasters have proclaimed 2008 the weakest season since at least 1970. [ID: nN06418196]

"The headline from the holiday season is 'one of the most challenging seasons we've seen in decades'. That main story hasn't changed," said Michael McNamara, SpendingPulse's vice president. "The key variable is when you look at December, (there are) signs of stabilization."

Total sales at specialty retailers, which SpendingPulse defines as apparel chains and department stores, fell 18.3 percent in December. But that is an improvement from the 20.2 percent decline the sector experienced in November.

Likewise, December saw specialty men's apparel sales fall 11.3 percent, versus 16.1 percent in November, and electronics and appliances sales fell 21.4 percent, versus a 25 percent drop in November.

With 2008's U.S. Thanksgiving holiday falling later in November than in the prior year, December accounted for even more of the holiday shopping period.

McNamara said December sales were aided by the fact that Christmas was on Thursday, so retailers were able to drive store traffic over the weekend immediately following with after-Christmas discounts. Lower gasoline prices may have also helped, he said.