Redbook avg. grows in final week
January 14, 2002-- Home Textiles Today,
Getting a last-minute lift from heavy post-holiday promotions, same-store retail sales moved up by 1.8 percent during the fifth and final week of December, said the widely watched Redbook Retail Sales Average, but it wasn't enough to save the month. Sales for all of December edged up just 0.1 percent, finishing off a brutally punishing year for many American retailers.
In what many are calling the worst holiday season in a decade, the 0.1 percent increase represents a steadily worsening performance from a moderate 2.1 percent increase recorded a year ago, and an even bigger drop from the 4.5 percent increase posted in December 1999. Even so, December turned out somewhat better than expected, against a targeted drop of 1.2 percent.
Hewing true to a trend begun more than a year ago, discounters sharply outperformed department stores, racking up a solid 3.7 percent increase for the month, compared with a 3.9 percent decline at the nation's department stores. During the final week of December, discounter sales climbed higher by 5.8 percent vs. a 2.9 percent decline for department stores.
"Retailers reported relatively strong sales in the final week, helping to lift the group for the month as a whole and exceed opening-month sales targets," said Redbook analyst Catlin Levis. "This was the first month since August that our model ended ahead of plan," Levis observed.
December sales fell 3.5 percent below November levels, but only because November sales for retailers following the National Retail Federation's 4-5-4 retail calendar were technically inflated, said Levis.
Adding insult to injury, the post-Christmas season was price-driven and promotional, putting downward pressure on margins and profits, said Levis.
Driven by heavy discounting, most retailers "were essentially on [plan] to slightly ahead for the week," said Levis. "There were reports of upside performance at some department stores, which tend to be more promotional than the discount stores at this time of year."
The analyst said, "Seasonal apparel and home goods were the focus of business at department stores helped by clearance sales. At discount stores, demand was for consumer durables and basic household commodities."
Looking ahead, Levis said it's difficult to predict January business from December results. "Given December's special weather and pricing conditions, it would be premature to extrapolate this performance into January, which is a transitional, clearance-driven month," she said. "January, a four-week month on the retail calendar, closes the fiscal year for most retailers. Our preliminary target for January is a year-over-year same-store gain of 1.6 percent, generating a monthly change of 4.0 percent versus December."
Redbook Retail Sales Average
Fifth week of December
|*Including chain stores and traditional department stores.
Source: Redbook Retail Sales Average, a unit of Instinet, a Reuters company.