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Same-Store Sales on Pace with January Plan

Driven by deep discounts and gift-card redemption, same-store retail sales modestly bested expectations during the first week of January, rising by 2.9% and topping a forecast of a 2.8% increase, the Johnson Redbook Index reported. Measured against the same week during December, sales rose by 1.7%, outreaching the target of a 1.6% increase.

Both department stores and discounters surpassed their targets, department stores rising by 3.0% vs. a 2.9% target; and discounters gaining by 2.9%, ahead of an expected 2.7%.

"Sales in the first week of January retained some of the post-Christmas momentum and overall sales were slightly above plan," said Redbook analysts Catlin Levis. "With the increasing popularity of gift cards, some retailers brought in new full-price spring merchandise earlier than usual in order to boost their bottom lines."

January, atypically, will be a five-week month, as the retail calendar is recalibrated, which happens every several years, the analyst noted.

"For same-store sales comparisons, retailers usually compare the first four weeks of the month with the equivalent year-ago period, and treat the final week as a separate entity. Typically, this final week is not carried forward, since it would cascade the slippage through the entire year." Even so, Levis noted, "not all retailers treat the calendar shift like this, and investors should expect some lack of uniformity, and therefore possible confusion, in the way monthly same-store sales releases are presented during the 2007 fiscal year beginning in February."

Johnson Redbook Index
First week of January, year-over-year % change

WEEK ENDED 1/6 1/13 1/20 1/27 2/3 MONTH TARGET
*Including chain stores and traditional department stores
Source: Johnson Redbook Index
Department stores* 3.0 3.0 2.9
Discounters 2.9 2.9 2.7
Redbook Index 2.9 2.8 2.8

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