US retailers' sales figures for November were almost universally disappointing except for Gap, which continued to show signs of a turnaround, albeit against weak figures last year.
The echoes of ringing cash registers over the Thanksgiving weekend had barely died away before reality set in yesterday: this holiday season is still going to be tough.
That was not unexpected. American shoppers do the bulk of their Christmas shopping after the Thanksgiving holiday, whose precise date, since it falls on the fourth Thursday of November, shifts from year to year.
With Thanksgiving falling on November 28th this year against November 22nd last year, November contained only two "holiday" shopping days, compared with eight in 2001, depressing the month's totals.
More significant was the generally cautious tone most retailers adopted towards prospects for December. The figures also put last weekend's apparently robust start to the holiday shopping season in perspective.
With six fewer shopping days, including one less weekend, between Thanksgiving and Christmas this year, the post-Thanksgiving weekend should inevitably account for a bigger slice of total holiday spending.
ShopperTrak RCT, a Chicago-based retail tracking company, has estimated that sales for last Friday, Saturday and Sunday rose 12.3 per cent over the same period last year, to $15.9 billion (€15.9 billion).
Wal-Mart, the discount superstore group and the world's biggest retailer, cheered investors with news of a 14 per cent sales increase on the Friday after Thanksgiving, to a one-day record of $1.43 billion.
But Emme Kozloff, retail analyst at Sanford Bernstein, said Wal-Mart was trading from 7 per cent more retail space this year, suggesting same-store sales from stores open at least a year were up 7 per cent. That is still creditable, but Wal-Mart has been taking sales from everyone else for years, a trend that has intensified during the economic downturn.
The International Council of Shopping Centers estimated that sales in US shopping malls, home to speciality retailers like Gap and The Limited, rose a modest 7.6 per cent for the three-day period. Perhaps most notably, analysts have not been rushing to rewrite their holiday sales forecasts in light of last weekend's performance.
One big question remains, however, and it is the source of much of the discrepancy between the more pessimistic and optimistic forecasts. To what extent have weaker retail sales since late summer led to pent-up demand that could yet be released in a late Christmas bonanza? Some factors that led to plunging consumer confidence indices in October - rising unemployment, weak equity markets, slowing real wage growth - have moderated in recent weeks. The benefits of continuing mortgage refinancing activity should also be feeding through to consumers' bank accounts. But concerns over terrorism and possible war with Iraq remain.- (Financial Times Service)
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