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Macy's, Inc.

Holiday sales report shows challenge for 2016

Holiday shoppers flocked online during the critical holiday shopping season, but overall sales in November and December were disappointing.

Sales rose 3 percent to about $626.14 billion, according to The National Retail Federation. That's below the forecast for a 3.7 percent gain the group had expected.

The group blamed the shortfall on unusually warm weather that led to bigger-than-planned discounts on clothing and other cold-weather items. It also pointed out that stores don't have the ability to raise prices in a still tough spending environment, leading to worse-than-expected deflation in electronics like TVs and other categories.

A bright spot was online,...