U.S. retailers posted their lowest holiday sales growth in four years after shoppers stayed at home despite some of the biggest discounts and promotions since the recession, retail industry tracker ShopperTrak said.
Retail sales between Thanksgiving and Christmas rose 2.7 percent, compared with 3.0 percent a year earlier, while the number of people walking into stores across the United States declined 14.6 percent, ShopperTrak said.
"Not only were people more promotional this year, giving away more margin, but it didn't generate the incremental traffic they would have expected," said Cowen & Co analyst John Kernan.
ShopperTrak, a Chicago-based company that measures foot traffic in more than 50,000 locations worldwide, said U.S. shoppers spent $265.9 billion during the latest holiday period. Its data excludes online sales.
The National Retail Federation, which will publish its 2013 holiday sales tally next Tuesday, has forecast an increase of 3.9 percent, including online sales.
The latest ShopperTrak data marks the first time since 2009 that sales growth has fallen below 3 percent, despite what analysts have called the most aggressive promotions since the recession.
After a disappointing Thanksgiving-Black Friday weekend, a group of eight major retailers, including Wal-Mart Stores Inc (WMT.N) and Macy's Inc (M.N), increased the number of circulars published by nearly 16 percent in the two following weeks, according to data firm MarketTrack.
And Morgan Stanley estimated promotions in the final week of the season were up to 10 percent deeper than a year earlier, prompting it on Monday to say that its retail team expects "the worst holiday shopping season since 2008".
In a sign of how tough the season was, J.C. Penney Co Inc (JCP.N) said on Wednesday it was "pleased" with its holiday season sales without giving specific results, prompting many on Wall Street to say the department store chain's sales may have declined last month.
Penney's shares fell more than 8 percent.
Retailers had six fewer days to woo shoppers last year than in 2012, a difference that prompted many stores to offer more promotions than usual earlier in the season.
As a result, retailers had a comparatively strong November, ShopperTrak founder Bill Martin told Reuters. They also benefited from strong sales in the last few days of the year, he said.
"Consumers took a break from shopping after Thanksgiving weekend, so retailers were pressured to offer deep discounts and promotions in the final week before Christmas to finish the holiday on a positive note," Martin said in an interview.
But fewer shoppers ventured out during a cold snap in many parts of the United States in early December. Martin said consumers were also inclined to browse online before making purchases, another contributory factor to lower foot traffic.
"It's a result of more and more technology in the hands of the consumer, which allows them to virtually window-shop," he said.
Online spending also fell below estimates. According to data firm comScore (SCOR.O), U.S. online retail spending rose 10 percent to $46.5 billion in the November-December 2013 holiday season, below the 14 percent growth it had forecast.
ShopperTrak estimated that U.S. retail sales would rise 2.8 percent in the first quarter of 2014, while shopper traffic would fall 9 percent.
Shares of Macy's, Wal-Mart and Gap Inc (GPS.N) were down about 1 percent on the New York Stock Exchange.
The S&P 500 Retailing Index .SPXRT was down 0.03 percent, while the Dow Jones US Retailers Index .DJUSRT gained 0.13 percent.