"Instead Of Sales Being Miserable They Are Just Terrible"

NEW YORK — Retailers who suffered through a miserable November _ despite a surge in sales the day after Thanksgiving _ are worried that the usual lull between the holiday weekend and the final days before Christmas could be dangerously quiet this year.

With financially squeezed shoppers holding out for even better deals or are simply already done, retailers who are already offering deep discounts will likely be forced to be even more aggressive as they lurch through a season looking to be the weakest in at least 30 years.

Worries about the holiday season increased Thursday after many retailers _ with Wal-Mart the notable exception _ reported November sales so dismal it was the industry's worst month since at least 1969. The malaise cut across all sectors as shoppers worried about layoffs and shrinking retirement funds and focused on necessities.

"It's an awful beginning to the holiday season," said Michael P. Niemira, chief economist at the International Council of Shopping Centers. "This is going to be a difficult holiday season for most retailers. There are going to be more bankruptcies." He predicted that the retrenchment in spending will linger for at least another six months.

Based on conversations with stores, this week's sales have been slower than expected, said Janet Hoffman, managing partner of the North American retail practice of Accenture. And with five fewer days between Thanksgiving and Christmas this year, retailers are under more pressure to make every day count.

Karen MacDonald, a spokeswoman at mall operator Taubman Centers Inc., said that stores are being more aggressive with discounting for this coming weekend compared with a year ago.

In recent years, shoppers have been increasingly delaying their holiday shopping to the final days before Christmas for better bargains, but analysts say they believe this year people just can't afford to spend more. C. Britt Beemer, chairman of America's Research Group, notes a higher percentage of shoppers he's surveyed had completed their holiday buying on Friday compared with a year ago.

"If retailers are not super aggressive with discounts, stores will be retail museums," said Beemer, who expects the lull will be more pronounced this year.

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Worries about the economy have helped Wal-Mart, which reported a 3.4 percent gain in same-store sales, surpassing the 2.1 percent increase that analysts surveyed by Thomson Reuters expected. The results excluded sales from fuel.

Wal-Mart added that business is starting to benefit from falling gas prices, noting that shopping trips increased and "customers had more discretionary income to spend." It expects same-store sales growth for December to be at the high end of its range of 1 to 3 percent.

However, Costco Wholesale Corp., usually a strong performer, reported a bigger-than expected 5 percent drop in same-store sales. Target Corp., which has been stumbling as its merchandise focuses more on nonessentials like trendy clothes, reported a 10.4 percent drop. And most mall-based chains and department stores fared even worse, with Abercrombie & Fitch Co., Nordstrom Inc., and Kohl's Corp. reporting percentage declines exceeding 15 percent.

Same-store sales are sales at stores open at least a year and are considered a key indicator of a retailer's health.

According to the Goldman Sachs-International Council of Shopping Centers index, same-store sales dropped 2.7 percent for November, making it the worst month since at least 1969 when the index began. November's results were even more miserable than the 1 percent drop that Niemira anticipated. Excluding Wal-Mart, the index declined 7.7 percent, indicating a widening gap between the world's largest retailer and the rest of the merchants.

Niemira is slashing his holiday same-store sales forecast for the combined November and December periods to be down as much as 1 percent. The only holiday period that was almost as weak was 2002, which posted a meager 0.5 percent same-store sales gain.

Sales data from Thanksgiving weekend showed a buying binge on Friday, but shoppers retreated the rest of the weekend. And even at stores on Friday, people focused on bargains and on small-ticket purchases as they slash their holiday budgets.

"Shopping was incredibly functional," said Wendy Liebmann, president of WSL Strategic Retail, retail consulting company. "There was no pleasure or joy."

Web retailers, which have seen their sales slow in the deteriorating economy, posted a 15 percent sales gain for the Monday after Thanksgiving _ the unofficial start for cyber shopping, according to comScore Inc., an Internet research company. But that gain was fueled by a 22 percent increase in the number of buyers, who spent on average 5 percent less compared with a year ago.

Many stores blamed their weak November figures in part to the quirk in the calendar of the late Thanksgiving. Niemira estimated that factor depressed November figures _ and will benefit December _ by 1.5 percentage points to 2.0 percentage points.

Comments

[Trebor1]

Cut the prices and we shall come!!!!!!!!!

[rkimball]

there are not the sales markdowns like last year. i don't blame people for staying away from the malls.

[tangie]

Oh, by the way--the booze went into the fruitcake. FYI.

[tangie]

I've made some fruitcakes. With a fifth of Jim Beam. That's what I'm giving for the holidays this year.

[CaptainHowdy]

I can't figure out the title of this article...

Is "miserable" worse than "terrible" or is "terrible" worse than "miserable"?

Modern "journalism"... sigh.

[falco]

Don't start baking stuff to give as presents, for heaven sake. The price of flour will quadrupel!

[miamia]

I was actually thinking about doing just that.
I better hit the store before there's a run on cookie mix.

[manitoumackinac]

My Christmas present to all my friends and family: "I don't want anything, and will be mad if you buy me something. Keep your money!"

[tomas0808]

The American Fantasy is OVER. Get used to it

[The Patriot]

Oh, please, let Abernazi and B!tch go out of business! I will dance my half-breed butt off in front of the empty hole at the mall for days!!

[Ready2Shine]

Sales may be down, but we have to learn that we as a whole do keep the economy running. People if you can continue to shop. Do most of your shopping online. and if anyone is interested in making money online got to http://www.TrueCashGiftPro.com

[TrooAmerican]

Ok Bush. Continue to shop! Spend spend! good advice...not.

so our strategy is to tell people to keep shopping if they have any money left so it can go to someone else's profits.

The only reason wal mart got a surge in sales is because they sell the cheapest junk at the biggest volume discounts since they've effectively wiped out all their nationwide competition with bulk chinese wholesale purchases to dump on americans who can no longer afford to shop at places like younkers, kohls, sears, jcpenny, etc.
its either walmart or the goodwill for 50% of american households.

[carrieanna]

Yes, but buying items in a store supports the store manager and the sales clerk....not to mention the staff that cleans the store.

p.s. It's not our jobs as US citizens to keep the economy going. Business owners know the risks of providing non-essential items when they open their stores. It's up to them to weigh the competition and assess what risks they're willing to take. Nowhere in the US constition is it written that I must be a "consumer." LIfe, Liberty and the Pursuit of Happiness are the most important aspect of being a US citizen. It's noteworthy that Jefferson used those words instead of the earlier words of George Mason and John Locke which idealized "possessions" instead of happiness as a right of man.

[cruisepuppy7452a]

Can't buy what you cannot afford. If you don't have a job, or are about to lose it, nobody is fool enough to blow thier money on crap they don't need. if they do, and then whine about thier credit cards, I don't want to hear it. This isn't the kind of economy people should be randomly blowing cash. Nobody knows what could happen and its unlikely anything huge will change in the near future. To the contrary, more jobs are on the way out, leaving people to worry how can they afford the basics, much less christmas? Priorites people, you must plan for the unseen. if ya don't and ya blew it at the mall or black friday, don't come screaming to me about it. I have zero sympathy.

[luvmarketvolatility]

Sales ain't all that is terrible.

http://myrEalitytelevision.com/2008/12/obama-promised-change-the-first-thing-he-changed-was-his-mind/

[AZ4thatone]

All of this gives a little credibility to the phrase "too much info.". We've been hearing about the tanked economy for months now and that has the public really afraid to spend money. The trickle down of this is that the more the public tightens their belts, the more of a reality the problem becomes. I do think that we've been headed into a recession for some time now, but I also feel that the constant scare from the media can also have a bit of a negative impact too.

[Wiserone]

Well, as soon as the RNC tell us all "where" the clothes they bought Palin are going to be dropped off at a charity outlet, I'd say we'd all be good to go as far as clothes holiday shopping.

[nowalnuts]

My grandma grew up with no money and her habit of buying gifts for people starting in January for that year's Christmas wore off on me. It makes me seem insane to my friends but if I buy one present to put away for Christmas with each paycheck I am usually totally done shopping long before any of the madness starts and don't have to rack up end of the year shopping on a credit card. I was able to spend Black Friday with my ailing grandparents watching super old game shows and we didn't need to buy a thing. It was wonderful!

[Meggie]

Yup. We do that , too. It makes the whole holiday season so much more enjoyable, too.