November retail sales slip 0.3%, a gloomy surprise

Discussion in 'Economics' started by ASusilovic, Dec 3, 2009.

  1. Originally, 5% to 8% growth had been predicted, after two months of year-over-year gains. Macy's and Saks are among those that miss expectations, although sales are up for discount retailers.

    In a stunning step backward, the nation's retailers saw sales fall in November -- a dismal start to the holidays and an ominous sign for the rest of the season.

    After two months of year-over-year gains that analysts hoped signaled the beginning of an industry turnaround, retailers suffered a 0.3% decline in the crucial November month, the International Council of Shopping Centers said today.

    That was far worse than the original 5% to 8% growth forecast, which was pared down to a 3% to 4% gain earlier this week. The weak results come on top of a 7.7% drop a year ago.

    More than four-fifths of retailers missed expectations, including department store Macy's Inc. (posting a 6.1% decline), teen retailer Abercrombie & Fitch Co. (with a 17% drop) and luxury seller Saks Inc. (down a massive 26.1%).

    "Santa delivers big lump of coal in November," said Ken Perkins, president of research company Retail Metrics Inc.

    The results are even more disappointing given retailers' early discounts, increased ad spending and sweeping Black Friday offers.

    But for many shoppers, it wasn't enough to entice them to spend freely.

    At Citadel Outlets on Thanksgiving night, Abel Polanco, 29, said he was downsizing his holiday spending this year by implementing a new rule: No gifts for family and friends whom he hadn't seen in a year.

    "I just want to live within my means," Polanco, of Whittier, said while standing in a line outside of the Calvin Klein outlet. "I'm blessed to have a good job right now, so I want to take advantage of that by not blowing my money on trivial things."

    Shopping in Union Square in San Francisco on Black Friday, Roxanne Franco, 31, bought buy-one-get-one-free sweaters at the Gap. The San Ramon resident said she would spend significantly less on Christmas presents after buying a house this year.

    "We want to make sure we keep that roof over our heads," she said. "So there will probably be more of the cookie-making and not so much the extravagant gifts."

    Not surprisingly, retailers that sell discounted merchandise fared better last month.

    Off-price retailers Ross Stores Inc. and TJX Cos., parent to the TJ Maxx and Marshalls chains, each posted an 8% increase. Teen retailer Aeropostale Inc. saw sales rise 7% and Costco Wholesale Corp. reported a 6% increase.

    Results are based on sales at stores open at least a year, known as same-store sales and considered an important measure of a retailer's health because it excludes the effect of new locations.,0,2092424.story