"The doomsayers were wrong. It was not the worst Christmas in 11 years." - Jeffrey Feiner, retail stock analyst at Lehman Brothers.

Wrong Again!
Retailers had a Merry Christmas after all

The Jan. 11 Tennessean carries a wire services story that says "a surge of last-minute shopping saved many retailers from a disastrous holiday performance, but the heavy discounting that fueled it was expected to hurt fourth-quarter profits." However, the longer and more detailed story in the New York Times Jan. 11 reports that same-store retail sales gains of 2.3 percent in December (compared to Dec. 2000) while "hardly dizzying growth" was cause for many retailers to raise their earnings guidance for the fourth quarter.

The Goldman Sachs Retail Index's tally of 2.3 percent growth was far better than the 1.5 percent growth expected by Wall Street analysts and was "enough to let the nation's merchants and Wall Street investors breathe a sigh of relief," the Times says. Analysts had expected the worst Christmas retail season in 11 years - since 1990, during the last recession. Instead, as the Tennessean reports, the increase in sales was the worst since 1995.

A little perspective is warranted: 1995 was not a recession year. In fact, the economy was growing in 1995, and its growth rate was accelerating. The economy - and retail sales - continued to grow in 1996, 1997, 1998, 1999 and 2000. And, most likely, 2001.

The takeaway from all that is this: retail sales grew last Christmas compared to the year before, just as they have for more than a decade. The just-ended holiday sales season enjoyed solid growth similar to that of 1995, at the eve of the acceleration of the economic boom in the late 1990s. So much for the doomsayers. So much for the recession.