Online shipping, layaway could hurt November statistics
November 30, 2012 5:00 AM
Black Friday shoppers jam the Mall at Robinson. For the moment, retailers are staying upbeat on the holiday season, with many noting they saw big crowds and sales over the Thanksgiving weekend that gave them momentum going forward.
By Teresa F. Lindeman Pittsburgh Post-Gazette
On Sunday, the Macy's Facebook elves posted this question: "Who's done with their holiday shopping already?" By Thursday, there were more than 250 comments, which seemed to be a mix of, "All done! Shopping, wrapping and home decorating!" and "Not me."
Based on the department store chain's sales results for the month, store management is likely hoping there are lots more people with lots more shopping to do.
The Cincinnati, Ohio, retailer reported sales at stores that have been open at least a year -- a statistic known as same-store sales that eliminates any boost from new stores -- dropped 0.7 percent in the four weeks ended Monday, while total sales for the period were down 0.6 percent.
Macy's wasn't alone in reporting a slippery November. Target posted a 1 percent drop in same-store sales, Nordstrom was down 1.1 percent and Kohl's reported a 5.6 percent decline.
Not everyone was down. Costco reported a 6 percent same-store sales gain, the Gap posted a 3 percent increase and Ross Stores posted a 2 percent gain.
Despite the overall disappointing sales results, retailers are staying upbeat on the holiday season, with many noting they saw big crowds and sales over the Thanksgiving weekend that is giving them momentum going forward.
There were valid reasons for the slower than expected start in November, with Superstorm Sandy causing the first big disruption, said Michael P. Niemira, vice president of research and chief economist for the New York retail group International Council of Shopping Centers, in his monthly analysis.
Beyond forces of nature, shifts in shopping patterns also are skewing the overall numbers, Mr. Niemira said. Online sales made during Black Friday weekend won't actually show up on the books until the items are shipped, he said. The same is true for layaway purchases made during November that aren't paid off until December.
The shopping centers group calculated that same-store sales at the 18 major chains that it tracked rose just 1.7 percent during the November period, not including drug store chains which report results next week. To hit the council's projection of a 3 percent overall sales gain for November and December combined, the group said the sales pace for December must accelerate to between 4 percent and 4.5 percent.
Layaway deals have been promoted by a number of chains this year, and online sales have been growing. IBM's Digital Analytics Benchmark found ecommerce sales on Cyber Monday earlier this week were up more than 30 percent over last year.
Retailers also have planned deliveries of fresh product and a cadence of promotions to keep customers interested over the next few weeks.
"We caution not to read too much into these soft numbers, given all the disruptions, and would look to December as a better gauge of consumer spending," wrote Ken Perkins, president of Retail Metrics Inc., in Swampscott, Mass., in his analysis of the November sales results.
An early Thanksgiving this year means the stretch between that holiday and Christmas is longer than usual. That could be an opportunity for more to sell more merchandise or it could give consumers an excuse to put off deciding what to do about gifts. Typically, there's a lull between Black Friday and the period just before Dec. 25 when procrastinators get serious and consumers decide the deals are tempting enough.
In the retail industry's favor, the Conference Board this week reported consumer confidence rose in November to its highest level in almost five years. On the other hand, the battle in Washington, D.C., over federal tax rates and automatic spending cuts could cause enough uncertainty to affect holiday sales, especially if the debate drags on.
Meanwhile, the merchants are going ahead with the things that they can control.
"Every aspect of our company has come together to provide customers with a seamless shopping experience whether they are shopping our stores, online, mobile or a combination of all three," said Macy's chief executive Terry J. Lundgren, in his sales report.