NEW YORK (AP) – Online retail sales, which have regularly boasted double-digit growth, fell 3 percent during the 2008 holiday shopping season and likely 4 percent in the fourth quarter, according to comScore Inc., as the short post-Thanksgiving shopping period and consumer cutbacks hit spending.

“This marks the first time we’ve seen negative growth rates for the holiday season since we began tracking e-commerce in 2001,” Chairman Gian Fulgoni of the consumer behavior research firm said in a statement late Tuesday. “The combination of having five fewer shopping days between Thanksgiving and Christmas and the severe economic headwinds faced by consumers has made this a really tough season for retailers, both offline and online.”

Up 19 percent in 2007

Online spending from Nov. 1 to Dec. 23 – the last day purchases could be shipped for delivery on Christmas Eve – fell 3 percent to $25.54 billion from $26.33 billion in the same period in 2007, comScore reported. In contrast, online holiday sales rose about 19 percent in 2007 and more than 25 percent in 2006 from the previous year, comScore data shows.

The firm had expected 2008 holiday sales to be flat compared with the 2007 holiday period.

The 4 percent drop to $36.38 billion in total online spending between Oct. 1 and Dec. 28 – just three days shy of the whole quarter – was the first quarterly decline comScore has seen in e-commerce.

Outlook is worse

Analysts agree the outlook for early 2009 is worse.

Piper Jaffray & Co. analyst Gene Munster estimated on Wednesday that online sales will drop 10 percent next year as consumers “significantly rein in discretionary spending and save more of their income to rebuild wealth and savings.”

Brick-and-mortar retailers were hit by an additional factor – winter storms that kept would-be shoppers in major cities.

like Seattle, Las Vegas and Boston at home.

This week, ShopperTrak RCT Corp. which measures retail sales and customer traffic at more than 50,000 stores, lowered its estimates for sales and traffic for the period between Thanksgiving and Dec. 25. It now expects a 2.3 percent decline in sales and a 16 percent drop in foot traffic, compared with an earlier forecast of a 0.1 percent slip in retail sales increase and 9.9 percent decline in traffic.

But the storms did not translate to enough of a boost for e-commerce to offset other problems.

Overall online results were down despite increased sales on several key days. Spending rose 6 percent on Thanksgiving Day and 15 percent the following Monday, also known as “Cyber Monday,” when consumers return to work after the long weekend and shop from their desks. And there were signs of trouble, even on those days: While the number of shoppers rose, buyers spent an average of 5 percent less than on Cyber Monday last year.

Despite the overall weakness this shopping season, some retail Web sites booked increased traffic between Dec. 1 and Christmas Eve as consumers looked online for bargains. Increased traffic, however, does not necessarily translate into higher revenue.

Wal-Mart Stores Inc., one of few brick-and-mortar retailers benefiting from consumer spending cutbacks, got a 4 percent boost in online visitors to 51.5 million.

Traffic to Amazon.com Inc.’s Web site rose 7 percent to 76.2 million, and visitors to Sears Holdings Corp.’s Sears.com rose 2 percent to 18.4 million. Macy’s Inc.’s online traffic increased 1 percent to 15.9 million visitors. Apple Inc.’s Web site saw 19 percent more visitors – a total of 35 million during the holiday season – and online visitors to Hewlett-Packard Co. rose 28 percent to 19.4 million.

EBay Inc. remained the most popular retail Web site, although its traffic fell 4 percent to 85.4 million during the period. Traffic at Web sites for Target Corp., J.C. Penney Co., Overstock.com, Dell Inc. and others fell during the period. Online traffic to Circuit City Stores Inc., which filed for bankruptcy protection in November, dropped 21 percent.

ShopperTrak Co-founder Bill Martin predicted that offline retail sales will tumble further in early 2009.

“We expect retail performance will dive over the next couple of weeks as retailers stop offering deeply discounted items and sales and traffic levels return to seasonal low points following the holidays,” Martin said. He said retailers will have to “get creative” to avoid greater struggles in the first quarter.

Standard & Poor’s Ratings Services on Tuesday predicted heavy downward pressure on retail next year.

“With the economy in a recession and consumers in turmoil due to sharp declines in discretionary incomes and rising unemployment, we see ‘stay-away-from-stores’ behavior continuing well into 2009,” said S&P analyst Gerald A. Hirschberg said in a research note.

On a more positive note, he said sharp cutbacks in retail inventory in 2009 may strengthen retailers’ margins, even amid weak sales.

AP-ES-12-31-08 1834EST