Dec. 26 (Bloomberg) -- Last-minute purchases over the pre- Christmas weekend failed to salvage what may be the slowest- growing holiday spending season in five years.

Sales at stores open more than 12 months rose 2.8 percent last week, the International Council of Shopping Centers and UBS Securities LLC said in a joint statement today. The results prompted the group to lower its forecast for November and December sales growth to ``a tad below'' the 2.5 percent it was predicting.

``Given the slow performance at the beginning of the month, it appears that the industry is on track for a sales gain that is slightly under our original expectation,'' Michael Niemira, the council's chief economist, said in the statement.

Target Corp., the second-biggest U.S. discounter, said Dec. 24 that sales at stores open more than a year may decline in December after customer visits slowed in the weeks after Thanksgiving. Sales in November and December this year may rise 4 percent, the slowest growth since 2002, according to the National Retail Federation.

Target, based in Minneapolis, dropped $1.54, or 2.9 percent, to $50.93 at 9:59 a.m. in New York Stock Exchange composite trading. The Standard & Poor's 500 Retailing Index fell 1.8 percent, with all 31 members declining.

Retailers began cutting prices today to clear out merchandise left over from the weekend spending surge, which boosted sales by 19 percent from Dec. 21 through Dec. 23, according to ShopperTrak RCT Corp.

Macy's Inc.'s Bloomingdale's offered as much as 75 percent off men's clothes, and closely held Lord & Taylor advertised half-off prices for children's coats today.

Slowing Sales

ShopperTrak predicted a 3.6 percent increase for 2007 holiday sales. MasterCard Inc.'s consulting unit said yesterday that sales from Nov. 23 to Dec. 24 gained 3.6 percent, the lowest in at least three years.

Gasoline at $3 a gallon and rising food prices have discouraged shoppers from spending during November and December, which account for 20 percent of retailers' annual revenue, according to the Washington-based NRF.

Costco Wholesale Corp., the largest U.S. chain of wholesale clubs, said the holiday season ``went well,'' the Wall Street Journal reported yesterday. Costco Chief Financial Officer Richard Galanti didn't immediately return a call for comment left at his Issaquah, Washington, office on Christmas Day.

Shoppers buying online led the growth in spending, with Internet sales gaining 22 percent from Nov. 23 though Dec. 24, Michael McNamara, vice president for research and analysis at MasterCard Advisors, said in an interview yesterday.

`You'd Be Disappointed'

``If you were expecting this holiday season to stimulate a new ramp-up in growth, I think you'd be disappointed,'' McNamara said. ``I think the vast majority of people in the marketplace had modest expectations.''

Apparel rose 1.4 percent from a year ago, McNamara said. Men's clothing climbed 2.3 percent, while clothes for women fell 2.4 percent.

Luxury goods, excluding jewelry, rose 7.1 percent compared with the same period last year, and footwear sales increased 6 percent.

MasterCard Advisors' SpendingPulse surveys retailers across the U.S. Its figures are based on sales in the MasterCard network and estimates of other forms of payment, including checks and cash. MasterCard is the second-biggest U.S. credit- card company.

Last year's holiday season grew 6.6 percent over 2005's holidays. Two years ago, retail sales grew 8 percent from the previous year, MasterCard said.

Although Target's customer visits increased for the week ended Dec. 22, ``this increase was not sufficient to compensate for the unfavorable traffic trends that carried over into December from the week following Thanksgiving,'' the Minneapolis-based retailer said on a recorded call.

To contact the reporter on this story: Joseph Galante in New York at jgalante3@bloomberg.net.

Last Updated: December 26, 2007 10:00 EST