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Chain Sales Falter

Don Hogsett -- Home Textiles Today, December 4, 2006

Even getting a lift from a strong 'Black Friday' and an aggressive spurt of early holiday promotions that had consumers storming the malls, same-store sales were something of a disappointment during November, and many of the nation's key retailers lagged behind October results even with the boost of early holiday sales.

Taking the temperature and feeling the pulse of the broad retail community, the Johnson Redbook Same-Store Flash Report, which tracks results at 70 broadline and apparel retailers, recorded a trendline that's heading south — and fast. Same-store sales rose by 2.2% during November, the Redbook reported, falling behind the far stronger gains of 3.2% in October and 4.3% in September. Underlining the breadth of the current malaise — despite continued strength at a handful of players like Federated and Target — the Redbook report recorded a slowdown in virtually every key channel during November. The only channel not to put up slowing results was discounters — results there were flat, held in check by pronounced weakness in U.S. Wal-Mart stores, where comps slid back by 0.5% following a modest 0.3% gain in October.

Elsewhere, the Redbook reported, the apparel channel was up 1.1%, compared with 1.2% in October; department store comps rose by 4.4%, off their 6.2% gain the prior month; furniture comps, led by persistent laggard Pier 1, tumbled by 15.3%, worsening from a 12.5% slide in October; and drug store sales were up 8.4%, behind October's gain of 9.1%.

The biggest stunner was the setback at Wal-Mart, the world's largest retailer and a widely watched bellwether of future consumer spending. Comps there declined by 0.1%, the first such monthly decline in a decade — and that's only part of the picture. Same-store sales in the core Wal-Mart business were off even further, slipping by 0.5%. Providing a lift to comps for the entire retail operation was the Sam's warehouse operation, where same-store sales rose 2.0%, matching their pace of the prior month.

Another big surprise was the sudden slowdown at JCPenney department stores. Same-store sales rose a slender 1.4%, way behind the blazing pace of 8.1% growth recorded during October. Even Kohl's, lately on a roll, couldn't keep up the pace, with comps up by 3.7%, behind a 4.2% increase the month before.

So who did win? As consumers turn their back on low, low prices — clued in to the fact that "cheap" frequently means lower quality and less of a true "value" — some department stores got a boost, most notably Federated, where same-store sales jumped up by 8.5% building on a strong 7.7% increase in October. In a class by itself these days, Target drove its comps up by 5.9%, blasting past a 3.9% increase the month before.

Some key retailers lagged October results even with a boost from 'Black Friday' sales

November Comps October Comps
source: HTT Research
Redbook Index of 70 retailers 2.2% 3.2%
J.C. Penney Dept. Stores 1.4 8.1
Kohl's 3.7 4.2
Ross 0.0 3.0
TJX 3.0 5.0
Wal-Mart Stores -0.5 0.3
Gottschalks -0.9 1.4
The Bon-Ton -10.5 -9.7


NOVEMBER SALES FOR KEY RETAILERS
Four weeks ended Nov. 25a(dollar amounts in millions)

2006 sales 2005 sales total %chg. same-store %chg.
a. Reporting periods vary from store to store.
b. Includes results of acquired nameplates, including Bergner's, Boston Store, Carson Pirie Scott, Elder-Beerman, Herberger's and Younkers.
c. Total sales were reduced by the closing of 78 duplicate stores following the May Department Stores acquisition.
d. For the 13 weeks year-to-date of the Costco fiscal year.
e. For the 13 weeks year-to-date of the FamilyDollar fiscal year.
f. Hancock total sales were reduced by the closing of 41 stores.
BJ's Wholesale Club $652.5 $621.8 4.9 0.6
The Bon-Ton Stores b $367.0 $141.9 158.6 (10.5)
Costco $4,840.0 $4,450.0 8.8 5.0
Dillard Dept. Stores $550.8 $561.0 (1.8) (3.0)
Dollar General $735.2 $686.3 7.1 2.2
Family Dollar $542.5 $502.1 8.0 2.5
Federated c $2,385.0 $2,617.0 (8.9) 8.5
Fred's $150.5 $140.2 7.3 2.0
Gottschalks $61.6 $62.5 (1.4) (0.9)
Hancock Fabrics g $34.8 $38.1 (8.7) (2.8)
JCPenney $1,906.0 $1,856.0 2.7 NA
Dept. stores $1,616.0 $1,565.0 3.3 1.4
Catalog/e-commerce $290.0 $291.0 (0.3) NA
Jo-Ann Stores $185.3 $190.2 (2.6) (4.6)
Kohl's Corp. $1,678.3 $1,493.7 12.4 3.7
Pier 1 Imports $144.3 $169.2 (14.7) (15.3)
Ross Stores $481.0 $451.0 6.7 0.0
Stein Mart $144.7 $135.4 6.9 3.8
Target Corp. $5,119.0 $4,583.0 11.7 5.9
TJX Cos. $1,600.0 $1,500.0 6.7 3.0
Wal-Mart Stores Inc. $28,570.0 $25,526.0 11.9 (0.1)
Wal-Mart Stores $18,761.0 $17,384.0 7.9 (0.5)
Sam's Club $3,314.0 $3,247.0 2.1 2.0
43 WEEKS YEAR-TO-DATE
BJ's Wholesale Club 6,604.3 6,294.4 4.9 1.2
The Bon-Ton Stores 2,479.7 964.5 157.1 (2.4)
Costco d $14,990.0 $13,850.0 8.2 4.0
Dillard Dept. Stores $5,796.0 $5,782.9 0.2 0.0
Dollar General $7,300.0 $6,800.0 7.9 2.2
Family Dollar e $1,624.5 NA 7.5 1.9
Federated c $20,196.0 $15,436.0 30.8 4.1
Fred's $1,380.0 $1,270.0 8.7 2.5
Gottschalks $507.4 $509.6 (0.4) 0.1
Hancock Fabrics f $311.4 $323.1 (3.6) (1.0)
JCPenney $15,145.0 $14,434.0 4.9 NA
JCPenney stores $12,844.0 $12,210.0 5.2 4.0
Catalog/e-commerce $2,301.0 $2,224.0 3.5 NA
Jo-Ann Stores $1,435.0 $1,469.0 (2.3) (5.6)
Kohl's Corp. $11,791.7 $10,244.0 15.1 6.4
Pier 1 Imports $1,149.5 $1,270.7 (9.5) (11.6)
Ross Stores $4,442.0 $3,983.0 11.5 4.0
Stein Mart $1,185.0 $1,189.6 (0.4) (1.4)
Target Corp. $43,728.0 NA 4.9 5.8
TJX Cos. $13,900.0 $12,800.0 8.6 4.0
Wal-Mart Stores Inc. $276,392.0 $246,615.0 12.1 2.0
Wal-Mart Stores $180,797.0 $166,941.0 8.3 1.9
Sam's Clubs $33,746.0 $32,334.0 4.4 2.7


WINNERS AND LOSERS
Same-store sales % change

Winners
Federated 8.5%
Target 5.9
Costco 5.0
Stein Mart 3.8
Kohl's 3.7
Losers
Pier 1 -15.3
The Bon-Ton -10.5
Jo-Ann -4.6
Dillard -3.0
Hancock -2.8


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