Late holiday shoppers reward retailers
Holiday shoppers bought a little more jewelry, electronics and boots, but passed by the women's clothing racks, according to sales figures.
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The nation's retailers welcomed a last-minute round of shopping in December even as snowstorms raged, unemployment levels remained high and concerns about the durability of the recovery kept many on edge.
One retail trade group calculated yesterday that a group of about 30 chains last month produced their best sales gain since April 2008 -- a 2.8 percent increase in stores open at least a year -- with consumers picking up toys, electronics and lots of footwear. Although shoppers dawdled as long as possible, retailers hung in there and generally avoided taking unplanned markdowns that would have gutted profit margins.
"I do think overall retailers had a decent month," said C. Britt Beemer, chief executive officer and founder of America's Research Group in Charleston, S.C. "They should be pretty happy."
Any cheers coming from retailers, both national and local, and from analysts were tempered by the fact that the industry still hasn't regained the ground lost during the bleak 2008 holiday and the worry that, with the holiday season now over, consumers may not see much reason to buy more.
Still, it's a lot better than it was.
The International Council of Shopping Centers, which tracks results from 33 chains, said sales for the two-month holiday period including November and December rose 1.8 percent, compared with a record 5.6 percent drop in 2008. Those numbers don't include the nation's largest retailer, Wal-Mart, which stopped sharing its monthly results last year.
"The 2009 holiday season pace was the strongest since 2006 [the last nonrecession holiday season] when sales grew by a hefty 4.4 percent," said Michael P. Niemira, chief economist and director of research for the New York retail trade group, in his official analysis.
In part because they'd been so cautious going into the holidays, a number of retailers were able to raise their projections for holiday quarter earnings. Target expects to meet or exceed analysts expectations, while Macy's raised its guidance as did Kohl's and Nordstrom.
South Side-based teen retailer American Eagle Outfitters yesterday tightened its earnings guidance for the fourth quarter to a range of 30 to 32 cents per share, up from its earlier projection of 29 to 32 cents. The chain reported a 7 percent December increase in sales at stores open at least a year, also known as same-store sales, that looked rather better than last year's 17 percent plunge.
Like a number of other retailers, American Eagle reported it had been able to stick with the promotions that it planned, rather than being forced into slashing prices just to move merchandise. That helps profit margins.
Meanwhile, the private Altmeyer's Bed, Bath & Home 12-store chain, based in Delmont, said it had a 5 percent same-store sale gain. "People wanted to decorate their homes a bit," said President Rod Altmeyer Sr., who said things went pretty well. He said the chain ran into a few issues when its vendors, who were being very cautious in ordering merchandise from overseas suppliers, couldn't quickly replenish inventory at the end of the season.
Ellen Calig, manager at Linton's in the Waterfront shopping center, said that store's customers were cautious -- perhaps buying a new party sweater to go with the black skirt or pants they already owned. But business has been solid overall, and the optimism she's hearing has made her more confident in buying merchandise for 2010. "We hear very good things from our customers," she said.
At Henne Jewelers in Shadyside, holiday sales were better than expected. "That doesn't mean sales are what they were in 2007 or the first part of 2008," John Henne said, "but overall we feel really pretty good about it, because in March a lot of us didn't know if the world was going to end."
In some ways, 2010 could be even more challenging for retailers to plan for than 2009, when it seemed clear early on that people were scared and hunkered down for the long term. Signals seem more mixed at this point.
Mr. Beemer's research indicated that only 78 percent of Americans actually completed the holiday shopping that they meant to do. That was the lowest number in years. Typically between 82 and 84 percent of consumers get it all done.
Americans seem ready to spend a little more as the new year starts, in the view of Frank Badillo, senior economist at the Retail Forward consulting firm in Columbus, Ohio. But he expects cautiousness to continue and some categories of retail to do better than others.
The shopping centers council is projecting January sales will be flat to up 1 percent over this time last year. Consumers don't need to buy gifts right now, and there may not be a lot of stuff on the clearance racks, wrote Mr. Niemira. But he is predicting total sales in the calendar year will rise 3 percent to 3.5 percent, which would be the best year since 2006.
In the short term, it would sure help if the winter weather would ease up. In some parts of the country, the snow, ice and freezing rain settled in around late December and show no signs of letting up. "People can't get out this past week," said Mr. Altmeyer. "I'm sure most retailers are hurting."
First Published January 8, 2010 12:00 am