Nov. retail sales were uneven
While Thanksgiving was early, adding shopping days, the credit crunch and fuel prices upset consumers.
The engine of the nation's consumer economy let out another belch yesterday, with retail-sales reports showing continued trouble during what should be the most profitable time of year.
November sales figures released by national and local retailers showed uneven results for a month that was supposed to launch the holidays with a bang on Black Friday.
Wal-Mart Stores Inc., which used deep discounts and promotions to lure consumers skittish over high gasoline prices and declining home equity, reported a skimpy 1.5 percent increase in November sales at stores open at least a year, a key industry yardstick.
Macy's Inc. reported a 13.4 percent jump in same-store sales from November 2006. But the company predicted a decline in December and said its November results were artificially high because of an unusually early Thanksgiving, which led to more big shopping days than usual between the holiday and the end of the month.
Other retailers reported slim or even flat sales, raising alarm that penny-pinched consumers may not be poised to spend their way out of one of the industry's gloomiest seasons in years.
"After about five or six years of fairly stellar performance by the retail sector . . . it's really a slowing down of growth," said Stephen Hoch, director of the Baker Retailing Initiative at the Wharton School.
The National Retail Federation, an industry trade group, has predicted the smallest annual sales growth since 2002.
For the most part, retailers reported modest November results that they said reflected both higher demand for winter merchandise and the increase in big shopping days.
Maternity retailer Mothers Work Inc., of Philadelphia, said same-store sales were flat in November, compared with the same month last year.
The company's results are in line with its recent projections that November sales would fall somewhere between a 1 percent decline and a 3 percent increase.
The Bon-Ton Stores Inc., of York, Pa., said comparable-store sales increased 8.6 percent in November, thanks to dropping temperatures that fueled demand for cold-weather merchandise.
Rite Aid Corp., of Camp Hill, Pa., reported a same-store-sales increase of 0.9 percent in November from the same month a year earlier.
Observers had expected lackluster results in light of higher gasoline and food prices that have drained shoppers' wallets.
But unseasonably warm weather in October created a logjam of unsold winter merchandise that retailers had hoped to come out of strongly in November.
Instead, they remain anxious.
"The coupons and the discounts - they just continue to be enormous and at levels that we're not accustomed to seeing," said Brian Ford, a retail specialist with Ernst & Young L.L.P. in Philadelphia.
"They're beside themselves with what the situation is," said Ford, adding that some companies already are worried that the downturn may continue into 2008.
Hoch, the Wharton retailing expert, said the November sales figures - particularly the higher ones - were "a little deceptive and do not truly convey the trouble retailers face.
"They don't actually take into account the fluke of the calendar," Hoch said.
In the case of Macy's, he said, a jump in same-store sales of about 13 percent was tempered by a company forecast that same-store sales would drop 4 percent this month.
Also, the November increase did not clearly reflect the increase in post-Thanksgiving shopping days - days whose sales otherwise would have fallen onto December's financial statements.
Target Corp., however, made that adjustment clear yesterday in reporting its 10.8 percent increase in same-store sales for November, Hoch said. The company also reported an adjusted result to make it more comparable with November 2006.
That adjustment showed a November sales increase of only 1.1 percent, he said.