Retailers see sales drop in dreary November
NEW YORK -- Retailers limped through a miserable November that even a surge of shopping after Thanksgiving couldn't save, making it the weakest month since at least 1969 and deepening fears that the critical holiday period could be the most dismal in decades.
As merchants announced their November sales figures Thursday, the deep malaise cut across all sectors as shoppers worried about layoffs and shrinking retirement funds focus on necessities. Among the few beneficiaries was Wal-Mart Stores Inc., whose posted sales that beat Wall Street estimates and predicted that sales for established stores for December should be at the high end of estimates.
However, Costco Wholesale Corp., usually a strong performer, reported a bigger-than expected sales decline. And most mall-based chains and department stores such as teen stalwart Abercrombie & Fitch Co., Kohl's Corp. and Macy's Inc. fared much worse, reporting percentage declines of over 10 percent.
"It's an awful beginning to the holiday season," said Michael P. Niemira, chief economist at 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.
According to the Goldman Sachs-International Council of Shopping Centers sales index of 37 stores, 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 dropped a dramatic 7.7 percent.
The tally is based on same-store sales, or sales at stores opened at least a year, which are considered a key indicator of a retailer's health.
Based on November's performance, Niemira is slashing his holiday 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 the Thanksgiving weekend showed a buying binge on Black Friday -- so named because it historically was the day that a surge of shoppers pushed stores into profitability -- but shoppers retreated the rest of the weekend.
