Sales, including online transactions, increased to $438.6 billion, the trade group said in a statement Friday, boosted by gift cards and electronics such as iPod digital-music players and the Xbox 360 video game.

Retailers exceeded forecasts for a 6 percent increase during the holidays with a 6.4 percent showing, helped by a 7.6 percent sales gain at clothing and accessories stores and a 7 percent jump at electronics retailers. Department stores struggled through the season, posting a 3 percent decline because discounters such as Target Corp. and luxury retailers attracted shoppers.

Salt Lake City-based furniture and electronics retailer R.C. Willey, owned by legendary investor Warren Buffett of Berkshire Hathaway, said its holiday sales were higher than expected along the Wasatch Front; in Boise, Idaho, and in Las Vegas and Reno, Nev.

"November and December were very good for us in all four of our markets," said Jeff Child, president of R.C. Willey. "In Utah, it was the best year ever."

Child said his company is experiencing firsthand Utah's booming economy.

"There is a lot of pent up [retail] demand," he said.

Some of the increases nationwide can be attributed to aggressive promotions and sales during the holidays. Retailers cut prices on coats, cashmere and jewelry, and displayed spring merchandise such as nautical-themed clothing to spur sales in the last two weeks of December.

In addition, gasoline prices retreated 28 percent after September, freeing up some money for holiday spending in a season that accounts for about a quarter of merchants' annual sales.

Holiday same-store sales rose 3.5 percent, the International Council of Shopping Centers said. The trade group had forecast a gain of 3 percent to 3.5 percent for stores open more than a year.

Utah's Provo Towne Centre, which has 100 stores that include anchors Dillard's, J.C. Penney Co. and Sears, is still compiling its holiday sales data. General manager Scott Hansen predicts a 5 percent gain in November-December sales from 2004 to 2005.

Luxury stores' same-store sales grew 4.2 percent, almost half last year's 7.7 percent gain. Discounters increased 2.8 percent and department stores added 1.9 percent, the council said.

Wal-Mart Stores Inc., the world's largest retailer, said fourth-quarter net income may be at the low end of its forecast range of 82 cents to 86 cents a share after December comparable sales rose 2.2 percent. Federated Department Stores Inc., the second-biggest U.S. department-store operator, posted a 3.4 percent sales gain last month, and Target, the No. 2 U.S. discount retailer, recorded a 4.7 percent increase.