Retailers see sales rise 3.9%
Posted on Wednesday, December 21, 2005
U. S. retailers’ sales rose 3. 9 percent last week over the previous week as shoppers stepped up purchases in the second-to-last full week of the Christmas season.
Sales rose at the fastest pace since Thanksgiving week after increasing 3. 2 percent last week over the prior year, the International Council of Shopping Centers and UBS Securities LLC said in a statement Tuesday. Sales at stores open at least a year are expected to rise 3 percent to 3. 5 percent this month, the New Yorkbased trade organization said.
Merchants cut prices on sweaters, coats and jewelry to attract shoppers and boost sales, which had been lackluster earlier in the month. More than 40 percent of Christmas purchases are made in the last two weeks before Christmas, Merrill Lynch & Co. analyst Mark Friedman wrote in a Dec. 12 report. The U. S. economy also created 215, 000 jobs in November, the most since July, buoying shoppers.
“It sounds like it’s slowly getting better, but nothing amazing,” said Maria Azari, who helps manage about $ 6 billion at Cambiar Investors LLC in Denver including shares of Target Corp. and Limited Brands Inc. “You’ve got more days between Thanksgiving and Christmas, and employment has definitely improved.” Only about a third of consumers have completed their shopping, according to a survey of 1, 000 people by market-research firm America’s Research Group. A year ago, almost 43 percent were done by the week before Christmas, Chairman Britt Beemer said.
Last week was the busiest of the season at the Northlake Mall in Charlotte, N. C., Karen MacDonald, a spokesman for mall-operator Taubman Centers Inc., wrote in an e-mail. Traffic rebounded on Dec. 16 after snow and sleet kept some shoppers away from some malls, including Northlake and the Mall at Short Hills in Short Hills, N. J., she wrote.
Federated Department Stores Inc. ’s Hecht’s was selling diamond accent bracelets for $ 18. 99, down from as much as $ 80. The chain also reduced men’s Boston Harbour leatherbomber jackets to $ 89. 99 from $ 300 on Dec. 16-17. Sears Holdings Corp. ’s Kmart discounted fine jewelry 70 percent and gift wrap 40 percent.
About 83 percent of the 40 specialty chains in a Goldman, Sachs & Co. survey offered greater promotions Dec. 17 than a year earlier, including American Eagle Outfitters Inc., Gap Inc. ’s Gap and Banana Republic and Pacific Sunwear of California Inc., analyst Margaret Mager wrote in a report. Stores that day lacked the “frenetic” crowds that shopped the day after Thanksgiving, she wrote.
“Traffic rose during the day, but consumers seemed to lack urgency, perhaps waiting for additional midweek specials or last-minute buying on Christmas Eve,” she said. Mager, who is based in New York, rates Gap and American Eagle “in-line.” Wal-Mart Stores Inc. on Friday said same-store sales for the month are rising within its forecast for a gain of 2 percent to 4 percent. Target said on Monday that sales for December were increasing in line with its forecast of a 4 percent to 5 percent rise.
A decline in gasoline prices earlier in the Christmas season may have helped spur spending, ICSC economist Mike Niemira said. Prices crept up in the past two weeks, with the average price for a gallon of regular unleaded gasoline last week rising 2. 6 cents to $ 2. 21. Gasoline costs 22 percent more than last year.
“Up until this last weekend, consumer spending patterns were largely mirroring 2004,” Niemira wrote in a report Tuesday. “Now, it appears that the consumer has slipped behind the ‘shopping curve. ”’ About 65 percent of consumers surveyed expect even steeper discounts this week, he wrote.
Some shoppers may have put off purchases in order to go shopping on Christmas Eve, which falls on a Saturday this year, Merrill Lynch’s Friedman wrote in a report. Shoppers may also be buying more gift cards, which aren’t counted as revenue until they are used, said Azari of Cambiar Investors.
About 18 percent of men haven’t begun shopping, according to a survey of 7, 324 consumers conducted Dec. 7-14 for the National Retail Federation by consumer marketing firm BIGresearch.
“ You do have a lot of men buying those diamond earrings for their wife,” said Anthony Chukumba, an analyst with Morningstar Investment Service in Chicago. “Quite frankly, guys tend to procrastinate.”
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