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Redbook reveals slow December

NEW YORK -Same-store sales edged up by 2.4 percent during the final, price-driven week of December, but still fell short of an expected 3.1 percent increase as consumers hit the bargain bins in fewer numbers and with far less gusto than retailers had counted on.

The nation's department stores and chains performed on plan during the last, promotional gasp of the holiday season, with a gain of 1.2 percent exactly matching the target. But the gap was wide between reality and expectations at the nation's big discounters, where comps moved up by 3.0 percent, compared with a much higher target of a 4.1 percent increase.

Looking back on the entire month, sales moved up by 2.1 percent, well behind the target of 3.1 percent, and shy of last December's increase of 3.2 percent.

"Sales were mixed to modestly firmer in the final week of December," commented Redbook analyst John Pitt. "Traffic counts remained relatively high as consumers were drawn to stores by post-Christmas markdowns. Retailers said the week-like the month-was more promotional than planned, suggesting continuing margin pressure in an already challenging fourth quarter."

Pitt added, "As expected, the holiday season was essentially determined by two strong weekends-the first after Thanksgiving and the second, immediately before Christmas-and a price-driven final week. This uneven distribution has become an established part of the seasonal pattern in recent years but may have been more sharply delineated this time because holiday buying took place against a weakening consumer economy, bracketing high-traffic shopping days with ultra-quiet periods."

Looking to the new year, Pitt said, "January, a five-week month on the retail calendar, closes the fiscal year for most retailers. The month is transitional, promotional and relatively low-volume, with merchants focused on clearing holiday and winter goods to make room for spring goods. Our preliminary target for the Redbook Average in January is 3.0 percent, year-over-year, vs. 3.6 percent last year, which would result in month-to-month growth against December of 2.0 percent."

Same-store Sales/Fifth Week of December


Retail Segment Week Ended 12/30 Week Ended 12/23 Week Ended 12/16 Week Ended 12/9 Week Ended 12/2 Month to Date Targeted Gain

Broadline*

1.2%

1.4%

0.1%

0.5%

0.8%

0.8%

1.2%

Discounters

3.0

3.1

2.1

2.7

2.8

2.8

4.1

Average

2.4

2.6

1.5

2.0

2.2

2.1

3.1


*Including department stores

Source: Redbook Retail Sales Average unit of Instinet

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