Retailers suffer from frostbite
December 15, 2003,
Same-store retail sales advanced by 3.2 percent during the first week of December, an unexpectedly weak showing and shy of a targeted gain of 3.8 percent, the Redbook Retail Sales Average reported, after severe snowstorms over parts of the nation shuttered some stores and kept shoppers at home and out of the malls.
"Snowstorms in the Northeast and parts of the Midwest brought lighter foot traffic to stores starting Friday evening through Saturday, with many Northeast stores closing early on Saturday," said Redbook analyst Catlin Levis. "The snowfall kept shoppers at home and boosted internet shopping,"
Hampered by the inclement weather, both department stores and mass merchants missed their sales targets during the early days of the all-important Christmas season. Department store sales improved by 1.1 percent, but fell short of a targeted gain of 1.7 percent. Mass merchant same-store sales grew by 5.0 percent, shy of a 5.4 percent goal, Redbook reported.
But given the back-loaded nature of December sales, with consumers holding off for last-minute bargains, the storms may have done less damage than had they occurred closer to the holidays. In another boost to retailers, this year the week of the 25th contains one additional pre-Christmas shopping day than last year, "which is expected to have a positive impact for the month," Levis noted.
With December sales "significantly backloaded," the analyst observed, "sales growth is expected to be strongest in the fourth and fifth weeks of December as consumers continue to delay purchases closer to Christmas."
While shoppers may be waiting for bargains, they may be waiting in vain, and could find some shelves empty when they finally are ready to buy, said Levis. "With retailers maintaining tight inventory control, shoppers may be unable to find what they are looking for."
Redbook Retail Sales Average
First week of December
|*Including chain stores and traditional department stores.
Source: Redbook Retail Sales Average, a unit of Instinet, a Reuters company.