Posted on 01/09/2003 10:58:47 AM PST by RCW2001
NEW YORK - The already disappointing holiday shopping season turned out to be even more dismal than anyone anticipated. The nation's retailers released weaker than expected sales figures Thursday, confirming that the just-ended season was the worst in decades.
Even usually strong retailers such as Wal-Mart Stores Inc., Kohls Corp. and Target Corp. suffered amid economic uncertainty, a short season and a lack of must-have items.
Department stores and many mall-based apparel stores, particularly Talbots Inc. and AnnTaylor Stores Corp., also languished.
But there were some pleasant surprises: Resurgent Gap Inc. and J.C. Penney Co. Inc. extended their comeback. And teen retailers Hot Topic Inc. and Pacific Sunwear of California Inc. whose results at stores opened at least a year, known as same-store sales, well exceeded Wall Street's expectations.
Same-store sales are considered the best indicator of a retailer's health.
Throughout December, many of the nation's merchants were continually reducing their sales targets and predicting disappointing sales for the season, but Michael P. Niemira, vice president of Bank of Tokyo-Mitsubishi Ltd. was surprised Thursday at how widespread the declines were.
"This certainly can be characterized as a weak season," said Niemira, noting that 51 percent of the 82 stores he tracks registered sales declines in December.
The company's same-store sales tally was up only 1 percent for December, far below his estimate of 2 percent to 2.5 percent.
That means that same-store sales for the combined November and December period, which accounts for almost 25 percent of retailers' annual revenues, rose only 0.5 percent. That confirms that the holiday 2002 season is the weakest since at least 1970, when the index began to track same-stores sales data.
Niemira and other analysts don't believe consumer spending will improve in the short-term.
"I think in the near term, there will be a continuation of a struggle in the retail industry," said Niemira, noting that the possibility of war in Iraq and the nation's shaky economy will remain obstacles this year.
The disappointing news from merchants followed a more upbeat announcement by the Labor Department (news - web sites) that new claims for unemployment benefits dipped last week, a sign that layoffs may be leveling.
For the work week ending, Jan. 4, jobless claims fell by a seasonally adjusted 19,000 to 389,000, the lowest level since Dec. 21. The decline came after new applications for unemployment benefits increased by 19,000 the week before.
Still, analysts say consumers are nervous about their jobs, and consequently will continue to scour stores for the best deal.
"There is still a great deal of conservatism among consumers," said Gregg Clark, vice president of retail at Cap Gemini Ernst & Young.
Gap, whose business started to recover in October following a prolonged slump, did surprisingly well with a 5 percent gain in same-store sales. That beat Wall Street expectations of a 3.6 percent increase.
Total sales were up 10 percent.
Wal-Mart reported same-store sales were up 2.3 percent, below Wall Street's already reduced estimate of a 2.6 percent gain. Last month, Wal-Mart had earlier pulled back from its projection of a same-store sales increase of 3 percent to 5 percent for December.
Total sales were up 9.5 percent. The discounter said inventory is at slightly higher levels than the company would like but is still manageable.
Target said same-store sales were down 0.3 percent, in line with reduced Wall Street expectations for a 0.4 percent decrease. The results were well below Target's original projection of a 3 percent to 5 percent gain.
Total sales at Target were up 7.6 percent.
Kohl's reported a modest 3.3 percent same-store sales gain in December, far below the 6 percent increase Wall Street anticipated. Total sales were up 19.4 percent.
Here are selected same-store sales for December for other leading retailers:
_AnnTaylor, same-store sales were down 14.6 percent; total sales declined 7.8 percent.
_Federated Department Stores Inc., same-store sales slipped 2.6 percent; total sales were down 0.8 percent.
_Hot Topic, same-store sales were up 10.6 percent; total sales increased 36 percent.
_Pacific Sunwear of California, same-store sales gained 16.1 percent; total sales were up 28.7 percent.
_ Penney, same-store sales at department stores were up 4.7 percent; total sales were up 0.6 percent.
_ Limited Brands, same-store sales were unchanged; total sales were up 4 percent.
_ Sears, Roebuck and Co., same-store domestic sales were down 4.6 percent; total sales declined 2.6 percent.
_ Talbots, same-store sales were down 9.1 percent; total sales decreased 3 percent.
On the contrary, very few Freepers believe these reports. That's why we browse the news on Free Republic. We get our news from a variety of reports, and make up our own minds.
This has been a long term trend, and a welcome one from my perspective. Just my opinion.
OK, maybe growth was at a standstill, but the economy emphatically was NOT at a "standstill."
Stop! He's breaking my heart!
The worst part is you hear the "disaster" story parroted everywhere by people who heard it from their local newsdroid.
This year there were no HOT items out there for shoppers to demand. At our Wal-Mart the 2 big items on the day after Thanksgiving sale were the $48.00 DVD and the bikes. Which went like hot cakes. When Christmas was over the mark down Christmas items were from the decoration dept were gone in 4 days. At the one K-Mart I wasted time waiting on my dog (he was at the groomers) they still had most of their decorations..marked down 60% on the shelves.
Shoppers have also noticed that a lot of the items at Sears, Penny's etc are almost identical to many that Wal-Mart sells. Only Sears and Penny's charge 2-3 times as much for them. All made in some foreign country to boot.
And note, too, there's NO MENTION of ONLINE sales. In our household, we bought a Kodak EasyShare digital camera online, and a number of jewelry items online from QVC. I also ordered and had shipped a gift for Mom online.
We spent, in other words, about what we normally do. But we did NOT do it in bricks-and-mortar stores.
Yes, the media is in an all-out full-court press to kill off any optimism about the economy. They're basically beginning the '04 election cycle right now.
Michael
That's the key to this puzzle that no one is mentioning. The 'short season' means that the number of 'Holiday shopping days' were down by 6 this year from the previous year. That's almost a 20% decrease in the number of day between Thanksgiving and Christmas. Add another 20% to the numbers for this year and they'll be comparable to last year or even better.
Well, that's an exaggeration, but shoppers HAVE become a GREAT deal more price conscious, and a lot of it has to do with the 'Net.
The days are gone when someone will blithely pay X number of dollars for something at, say Dillards, without first checking to see if the identical item isn't available somewhere else cheaper. For instance, the digital camera we bought online WITH shipping was still $100 cheaper than the same camera at a local discounter, and that's BEFORE TN sales tax.
I have a feeling that the same money was spent, it's just not being spent in the more traditional locations.
Michael
If you must be a fool, dont advertise it. By your standard of a standstill, all economic activity would have to disappear. When you are selling 100 units in 2001 and 100 in 2002, then your business is standing still. There is no growth. Without growth, budgets are cut and so is employment. Grow up and join the real world.
What do you do for a living other than shop? If you were out there as an entrepreneur or in sales you would know that things arent as optimistic as you seem to think. Perhaps you're living off Social Security and your savings, so you can just sit back and bitch about those that say the economy is tough. If you were in a competitive segment of the economy you would know things suck. My clients are hurting and as a result my business is off more than a third from last year.
Gee that analysis and a dollar will buy you a cup of coffee. What difference does it make that reason sales are slack is because the season was short. If you do 25% of your business during the month preceding Christmas and that season is a few days short it doesnt make any difference. The presents need to be purchased in time for Christmas. Relatively few people are going to go out and buy their gifts after the big day. If the number of days in the season shrinks, then you have to sell more each day to make up for it. Otherwise Christmas related sales are permanently lost. And I thought it was just the Democrats that were challenged in their understanding of basic Economics.
I know many folks who used only the web to get their shopping done.
Seems this is a chicken little story. If we didn't spend it on gifts we spent it at the food store. I'm sure we're not the only ones who switched shopping categories. The bottom line is that WE SPENT IT ALL AGAIN this year just like most everyone else.
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