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Redbook average off despite holiday push

NEW YORK -Finally shaking off their apathy and pulling out their wallets, and braving some arctic weather to boot, consumers trekked out to the malls in the days before the Christmas holiday, providing a strong lift to same-store sales, but not enough to help overall figures for the month to meet expectations.

The widely watched Redbook Retail Sales Average clocked a strong 2.6 percent increase in same-store sales during the critical pre-Christmas week, rebounding from weakness during the first three weeks of December. But as good as they were, the numbers weren't enough, and still fell shy of the even bigger 4.9 percent increase rung up during the same period a year ago.

Pointing to a disappointing profit picture for the closing quarter of the year, the Redbook Average posted a 2.1 percent increase for the four weeks month-to-date, compared to a target of 3.1 percent.

Scoping out the week running up to the holiday, Redbook analyst John Pitt said, "Sales improved substantially, traffic counts were up on the previous period, and average purchases were larger. For some retailers, Saturday was the second-biggest single shopping day this year after Black Friday, the post-Thanksgiving kickoff to the holiday season."

That was good news in a bleak month, said Pitt, "but the last-minute Christmas rush was not enough to make up for the pre-Christmas slump. By the time the fourth week arrived, most retailers needed to perform substantially better than plan to have a chance of meeting their monthly targets."

Pitt added, "Although the week was a considerable improvement on the rest of the month, it could not deliver a miracle. And since the fifth and final week of December represents only 10 to 15 percent of total monthly volume, it is unlikely to make up the shortfall, even on the most optimistic assumptions. Consequently, we expect December to end below target, in line with the current month-to-date average."

The season, said Pitt, "was held back by weather-many retailers reported regional weakness in the Midwest, where winter storms were fiercest; a tough comparison against last year's Y2K spending, both festive and fearful; and, above all, a slowing economy."

Retailers reported a more promotional Christmas than planned, Pitt observed. "The markdowns should deepen in the final week and through January, since missed sales targets imply inventory overhangs that must be cleared before the spring season starts."

SAME-STORE SALES - FOURTH WEEK OF DECEMBER


RETAIL SEGMENT WEEK ENDED 12/23 WEEK ENDED 12/16 WEEK ENDED 12/9 WEEK ENDED 12/2 MONTH TO DATE TARGETED GAIN

Broadline*

1.4%

0.1%

0.5%

0.8%

0.7%

1.2%

Discounters

3.1

2.1

2.7

2.8

2.7

4.1

All retail

2.6

1.6

2.0

2.2

2.1

3.1


*Including department stores

Source: Redbook Retail Sales Average unit of Instinet

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