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Retailers report mostly good results for December sales
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Snapping up sale items the day after Christmas at Target. -
Rachel Danko of Okemos, Mich., and her fiancee, Joshua Krier of Royal Oak, Mich., celebrated Christmas with Joshua's family and did their last-minute shopping on Walnut Street in Shadyside.
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Christmas proved it can still deliver nice surprises, with consumers in December shrugging off predictions that bad news, rough weather and political drama would keep them from shopping and instead producing a decent holiday for many merchants.
A tally of results for the month from 20 major retail chains, excluding the drugstore sector and non-participant Wal-Mart, showed a 4.5 percent sales gain compared to the same period a year earlier, according to a New York-based retail industry group.
Getting to that final number was no sure thing as the economy bumped along -- and not every retailer was gifted equally in the end.
Nordstrom achieved an 8.6 percent sales increase in stores open at least a year, a statistic known as same-store sales, but Target reported its same-store sales were flat with the same period last year despite a partnership with upscale merchant Neiman Marcus that had been expected to generate excitement. The discount chain said its strongest results in December came in food sales.
Macy's produced a 4.1 percent same-store sales gain and Kohl's posted a 3.4 percent gain. A number of retailers have stopped releasing monthly sales results, making the industry snapshot more limited than in past years.
PG graphic: Retail sales
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Warehouse club chain Costco reported a 9 percent gain, while off-price retailer TJX had a 6 percent increase through its stores, including T.J. Maxx and Marshalls.
Consumers, as usual, did their shopping in their own time and on their own terms.
November sales had been lower than expected, a fact blamed in part on Hurricane Sandy, online shopping and even a push by several chains to offer layaway services. Then, after a solid Black Friday, malls had plenty of available parking through the first weeks of December.
"Despite the worry of the slow start to the holiday season, sales rebounded in December as consumers took advantage of more shopping days this year compared to last," said Michael P. Niemira, vice president of research and chief economist for the International Council of Shopping Centers, in his analysis.
An early Thanksgiving stretched the period between that holiday and Christmas, meaning the usual post-Black Friday lull lasted even longer than usual and likely frayed a few store managers' nerves.
"This last-minute shopping coupled with post-Christmas bargain hunting and early gift-card redemption helped propel sales at the end of the month," Mr. Niemira said.
Ken Perkins, president of Retail Metrics Inc., in Swampscott, Mass., cheered the fact that the results weren't as bad as many feared, but he noted several retailers projected quarterly earnings below Wall Street expectations. "This suggests some of the sales may have come at the expense of some margin," Mr. Perkins wrote in his analysis on Thursday.
He said both sales and store traffic were slow in December until the weekend before Christmas, then surged as retailers began coming up with deeper discounts and clearance deals.
Kohl's chairman, president and CEO Kevin Mansell, in his monthly sales report, said, "Sales came late in the holiday shopping season and, as a result, were at deeper discounts than planned. We are taking the necessary markdowns in the fourth quarter to manage our inventory as we transition into the spring season."
Bon-Ton Stores, for its part, said it ended December with less clearance inventory.
Congress and the president pushed the fiscal cliff crisis to the last possible moment and beyond, but it didn't appear to have a major impact on shoppers. Still, the National Retail Federation, a trade group in Washington, D.C., applauded the deal worked out earlier this week, saying tax hikes that were avoided could have kept retail sales in 2013 flat for the year.
January is typically a time of reflection and redirection in the industry, with retailers sometimes culling slower-performing stores or even considering if they need to change tactics entirely in order to survive.
In that vein, Macy's on Thursday announced it would close several stores around the country -- none in the Pittsburgh region, although several in downtown locations around the country. In addition, analysts continued speculation on what chains such as Best Buy and J.C. Penney will do next as they work to adapt to changing consumer demands.
Retailers of all sorts are likely to continue investing in their digital capabilities. Online shopping firmly infiltrated holiday traditions last month with chains such as Macy's, Bon-Ton Stores and Kohl's all reporting double-digit increases in e-commerce sales.
On Thursday, online research firm comScore reported that consumers spent $42.3 billion online during the November-December holiday shopping season, a 14 percent increase over the previous year. Mimicking the offline world, sales surged at the end after slower growth early in December.
First Published January 4, 2013 12:00 am
