Late Shoppers Save Christmas for Retailers
Larry Thomas -- Furniture Today, January 10, 2005
Retailers got a much-needed boost during the all-important Christmas season as an 11th hour spending spurt during the fifth week of December helped push same-store sales numbers for all of the month modestly ahead of plan, the Johnson Redbook Index reported.
Fueled by post-holiday sales, gift card redemption, seasonably cool weather and an influx of tourists drawn to the United States by favorable exchange rates, same-store sales climbed 5.2 percent during the final week of the month, providing a strong finish to a month that had begun on a weak and worrisome note.
With the strong spurt at the finish line, same-store sales for all of December advanced 2.8 percent, modestly topping a target of 2.6 percent.
Discounters, by far the largest segment of the sales pie, grew sales 6.6 percent during the final week. For the five weeks month to date, mass merchant sales grew 4.2 percent, beating a targeted gain of 4 percent. Department stores drove their sales up 3.6 percent for the week, improving on a 2.2 percent increase during the week just prior to the holiday. For all of December, department store sales increased 1.3 percent, besting a targeted 0.9 percent gain.
“The final week of December saw most retailers in our sample have a strong finish,” said Redbook Analyst Catlin Levis. “Stores generally lagged behind their sales targets for most of the month, but the surge in business in the final week was sufficient to put many ahead of plan.”
Levis said, “This lift was supplied by shoppers' appetites for post-holiday clearance sales, redemption of gift cards and tourists taking advantage of exchange rates as well as weather, which turned sharply colder in the Midwest and rainy in the West Coast. Seasonal apparel, such as cashmere sweaters and shoes, were among the strongest sellers.”
The analyst commented, “There were reports of significant upside performance surprises at some department stores, which tend to be more promotional than the discount stores this time of year. The result was stronger sales suggesting continuing margin pressure in an already challenging fourth quarter.”
Looking ahead, January is a four-week month on the retail calendar, and closes the fiscal year for most retailers. The month, said Levis, “is transitional and promotional with merchants focused on clearing holiday and winter goods in order to make room for spring goods. Our preliminary target for the Redbook Index in January is 2 percent year over year, which would result in month-to-month growth against December of a 0.1 percent gain.”
Johnson Redbook Retail Sales Index
Fifth week of December
|*Including chain stores and traditional department stores.
Source: Johnson Redbook Index
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