Redbook: same-store sales slow

Soft home sales lead retail gains in January

Don Hogsett, February 11, 2002

In a strong signal that consumers may be maxed out after the holiday's strong promotions and growing antsy once again as layoffs continue to rise, same-store sales continued to slow moving into the fourth and final week of the month, according to the widely watched Redbook Report.

Still stunted by weakness in department stores, same-store sales edged up by 1.3 percent during the final week of the month, losing much of their energy after a strong start to the month with a 1.9 percent bump-up in sales.

But the news remained good for home textiles producers, said Redbook analyst Catlin Levis, with sales of soft home products and home appliances leading the gains.

With discounters and department stores seeming to exist in parallel and unequal universes, the performance gap continued to widen between the two channels as it has for more than a year and a half. Sales at the nation's low-price discounters climbed by 5.0 percent during the closing month of the week, while high-margin department stores declined by 4.5 percent. For the entire month, discounters gained by 4.9 percent, well ahead of a targeted gain of 4.2 percent. But department stores continued to stumble, declining by 3.8 percent, substantially missing a more modest targeted drop of 2.7 percent.

"Sales performance pulled back slightly from the previous week," Levis noted. "Overall, the month's turnout was in line with plan. Clearances should continue to dominate sales activity for several more weeks as old inventories are moved out and fresh early spring goods arrive."

In good news for this industry, Levis said, "Home-related soft lines, home appliances, fitness equipment, shoes, food and some apparel categories led sales growth. Most retailers said they had made no significant additional price reductions since the fairly extensive discounting that occurred before and after Christmas."

Looking ahead, Levis said, "February is a four-week month on the retail calendar, ending on March 2, and is the start of the fiscal year for most retailers. The month contains two major events, Valentine's Day and President's Day. Our preliminary target is year-over-year same-store growth of 2.1 percent." That, she pointed out, generates a month-over-month decline of 1.1 percent from January.

Redbook Retail Sales Average
Fourth week of January

Week ended 1/12 1/19 1/26 2/2 Month Target
*Including chain stores and traditional department stores.
Source: Redbook Retail Sales Average, a unit of Instinet, a Reuters company.
Department Stores* -2.8 -4.0 -3.9 -4.5 -3.8 -2.7
Discounters 4.9 4.8 5.0 5.0 4.9 4.2
Redbook Average 1.9 1.4 1.5 1.3 1.5 1.5

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