November 30, 2004
Retailers Post Unimpressive Holiday Sales
NEW YORK - The holiday shopping season got off to a modest start after bargain-hunters jammed malls on Friday for early bird specials but did less buying the rest of the weekend after the sales ended.
Big chains including J.C. Penney Co. Inc. and Sears, Roebuck and Co. were pleased with their sales. Industry leader Wal-Mart Stores Inc., which didn't offer deep discounts to lure the early shoppers, said its sales in the seven days that ended Friday were disappointing, and lowered its November sales outlook.
"Friday overall was strong, but Saturday was weak and disappointing, so together it was only a modest two-day performance," said Michael P. Niemira, chief economist at International Council of Shopping Centers. "Still, I continue to believe that this is not a bellwether for how the season will end up."
Wally Brewster, spokesman at Chicago-based General Growth Properties, which operates 224 malls in 44 states, said sales and traffic were strong on Friday, but "stabilized" the rest of the weekend. As a result, he expects sales for the weekend to increase in the low single digits, in line with modest expectations.
Wal-Mart's holiday weekend sales suffered because it didn't offer the deep discounts it did in past years, hoping to boost profits, analysts said. Penney and Sears did better by wooing customers with two days of big price breaks.
Wal-Mart's shares fell $2.17, or 3.92 percent, to close at $53.15 Monday on the New York Stock Exchange, but added six cents in after hours trading, reaching $53.21.
"Wal-Mart was a big loser because they didn't get the same numbers of early bird shoppers as they did a year ago," said C. Britt Beemer, chairman of America's Research Group, based in Charleston, S.C. "The retailers that won this weekend were the ones that were super aggressive in special purchases and special pricing."
Wal-Mart said Saturday it now expects same-store sales in November to be up only 0.7 percent, instead of the projected 2 percent to 4 percent.
Niemira, who serves as an adviser for ShopperTrak, which tallies sales results from 30,000 outlets, said a clearer picture of Thanksgiving weekend shopping will emerge Thursday when the nation's retailers report their same-store sales figures for November. Same-store sales, or sales at stores open at least a year, are considered the best indicator of a retailer's performance.
Total retail sales were up 10.8 percent on Friday compared to the day after Thanksgiving last year, but dropped 6.5 percent on Saturday compared to a year ago, ShopperTrak said. As a result, total sales for Friday and Saturday combined increased a modest 3.5 percent.
Niemira said discounters are likely to have a hard time this holiday season because the lower-end customer has been the most hurt by rising gasoline prices. Luxury stores are expected to do the best, and "everything in the middle is anybody's game," he said.
The first weekend of the season, while important, is not as critical as the last 10 days before Christmas. Niemira still forecasts a sales gain of 3 percent to 4 percent for holiday period, despite the lackluster start.
Karen MacDonald, a spokeswoman at Bloomfield Hills, Mich.-based Taubman Centers, which own or manages 22 shopping centers across the country, said sales and traffic over the Thanksgiving weekend should be better than expected, based on a spot check of 10 malls. On Friday, business was up in the mid-single digits, better than anticipated. On Saturday, sales met projections, with stores reporting sales were anywhere from unchanged to up mid single digits. And Sunday, business was unchanged from a year ago.
The Washington, D.C.-based National Retail Federation expects that total sales, excluding restaurant and auto sales, will rise 4.5 percent for the November-December period. That would be less than the 5.1 percent gain of a year earlier.
Comscore Networks, an Internet research company, reported that Americans spent $250 million online, excluding travel, on the day after Thanksgiving, up 41 percent from $178 million a year ago.