Retailers give thanks for solid start
December 3, 2001,
Considering the economic environment, the holiday shopping season began with a solid start over the Thanksgiving weekend, as retailers were generally satisfied with their results.
The depressed economy was predicted to favor the discounters as consumers watched their pennies this season, and the holiday weekend showed just that: Wal-Mart posted a record-breaking sales day on Black Friday, while Kmart had 8.4 percent comps throughout the weekend.
Other retailers, such as Sears, Pier 1 Imports, Stein Mart and Gottschalks, found the home category a strong performer during the key retail weekend.
The Instinet Research Redbook Average climbed 4.8 percent for the third week of November, with both discount and department stores sharing in that improvement. The report also indicated that retailers said they had strong turnover in gift categories such as toys, hardware and home electronics, as well as decorations and holiday trimmings.
The TeleCheck Retail Index, based on year-over-year, same-store comparisons of the dollar amount of checks written by consumers at more than 27,000 locations, saw same-store retail sales increase 2.3 percent over the same three days last year, with a robust start on Black Friday that eventually tapered.
"For the most part, spending continued steadily throughout the weekend," said William Ford, senior economic adviser at the Houston-based TeleCheck. "It is not unusual to see a slight slowdown in sales after an initial surge on the day after Thanksgiving — particularly with a long shopping season … We anticipate the strongest sales increase to occur in the last week before Christmas."
The International Council of Shopping Centers (ICSC), which surveys sales results from more than 4,000 specialty stores in 80 regional malls nationwide, but doesn't include department stores or other mall anchors, found sales decreasing 1.5 percent for that weekend. By category, however, it found that home furnishings and furniture grew 5 percent compared to last year.
Wal-Mart Stores had a record Thanksgiving Friday, with sales of more than $1.25 billion at the company's domestic Wal-Mart stores, Supercenters and Neighborhood Markets. Wal-Mart's Holiday Blitz, an annual five-hour day-after-Thanksgiving event, drew heavy traffic, the company said. Comps for that day in the Wal-Mart division were up in the mid-single-digit range.
"Yesterday's record sales and heavy traffic into our stores demonstrated that consumers are looking for the kind of value, selection and customer service that Wal-Mart delivers every day," said Tom Schoewe, executive vp and cfo. For the week ending Nov. 23, comps for the Wal-Mart division were above plan, while they were below plan for Sam's Club.
Kmart saw high-double-digit increases in sales for Thanksgiving, and sales for that day and the holiday weekend were up 8.4 percent, said Chuck Conaway, chairman and ceo, during Kmart's third quarter conference call.
At Kmart's Bluelight website, sales were up 45 percent over last year, said Dave Karraker, spokesman. "Martha Stewart drove a lot of that," he said. "Martha is a consistent winner. Areas like toys and electronics spiked for that weekend, but Martha is always consistent."
Conaway cited these as heartening results. "The early indications for the season are encouraging," considering the economic uncertainty. To ensure the stores were prepared for the holidays, Kmart received seasonal merchandise earlier than last year.
Kmart also saw the Harry Potter product doing very well, said Karraker. Product has been in the stores since September, he said, initially as an impulse buy.
Hoffman Estates, IL-based Sears performed "right where we thought we would be" for the Thanksgiving weekend and even a bit above plan, said Paul Liska, executive vp and cfo, during a Lehman Brothers retail seminar, with comps in the negative low single digits. "The holiday is coming in as we expect it to," he said, though it will be hard to predict what will happen with the challenging environment.
"Home fashions had a very good Thanksgiving weekend," said Sears' Peggy Palter, public relations manager, and that included Friday, Saturday and Sunday. "It was one of the leading categories for the company." Within home textiles, down comforters, bedding ensembles, luxury sheets, bath and accent rugs and bath accessories were the strongest performers.
Pier 1 Imports, Fort Worth, TX, "had an outstanding weekend for home across the board," said Patrick Farrell, director of merchandising, home furnishings. The textiles category, which includes chenille pillows, Indian textiles, upholstery and tabletop, had great increases overall, he said, but the pillow and tabletop categories continue to be especially strong over last year. In addition, Pier 1 is in a good inventory position in all textiles areas.
"We were generally pleased" with both the home area and the sales of Thanksgiving weekend," said Pat Stagner, gmm, Stein Mart, Jacksonville, FL. She added that she thought the holiday season would go very well.
Gottschalks, Fresno, CA, had its third year of large double-digit increases in home textiles, said Tom Fraser, dmm, textiles. Seasonal and cold-weather items were the leading categories. And the retailer prepared for the season with below-plan inventories. "We felt that we had to lean up inventories, but we're ready to buy if the demand for textiles is there."
Soft home for Saks' Department Store Group performed very well the Friday after Thanksgiving, said Bruce Morel, division vp, dmm, soft home. And though the weather was warm, down and down-related products were one of the top sellers for the weekend, along with bath accessories, bath themes, such as holiday, lighthouses and birdhouses, and fashion bedding, such as products from Croscill.
Morel said that basic bedding was also very strong for the retailer, especially featherbeds and fiber top-of-mattress. "The customer is finally catching on to what that is."
Since the holiday weekend, however, sales have slipped a bit, Morel said. "The next few weeks will tell the tale" of how the season will play out.