Holiday sales report shows boost in 2016

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A stronger economy helped boost holiday sales both in stores and online this season, but department stores continued to struggle as habits shift.

Sales rose 4 percent to about $658.3 billion, according to The National Retail Federation. That beat a forecast for a 3.6 percent boost. Online sales alone rose 12.6 percent to $122.9 billion, topping a forecast for growth of up to 10 percent.

"Retail mirrors the economy," said National Retail Federation President and CEO Matthew Shay. "And while there might have been some bumps in the road for individual companies, the retail industry overall had a solid holiday season and retailers will work to sustain this in the year ahead."

The report is partly backed by a Commerce Department report also showing sales increases in December, notably in auto buying and online shopping. The National Retail Federation bases its report on data from the Commerce Department.

The holiday season is a crucial period of retailers because it accounts for as much as 40 percent of a retailer's annual sales.

Sales of health and personal care items rose 6.7 percent, while furniture sales rose 4.8 percent, and clothing sales rose 2.5 percent. Electronics sales declined 2.3 percent.

The biggest downturn came from department stores, with a 7 percent decline. Many department stores are still grappling with increased competition from online shopping sites, such as Last week, Macy's said it would shutter 68 stores after a disappointing shopping season where sales fell 2.1 percent at established stores in November and December. It also cut its full-year profit forecast.