Redbook average feels impact of WTC disaster
September 24, 2001,
With anxious consumers sitting out much of the week, glued to the tube and watching news reports, same-store retail sales nose-dived during the second week of September, aborting a rebound begun weeks before with the first wave of rebate checks.
Hammered in the aftermath of the terrorist attacks upon New York's World Trade Center and the Pentagon were sales in the nation's big department stores, which registered a double-digit drop in same-store sales, dropping by 13.7 percent.
Sales in the big discount channel held relatively steady, though, advancing by 3.7 percent, as many consumers flocked to the malls to buy groceries, flags and television sets, said Redbook analyst Catlin Levis.
Through the first two weeks of the month, same-store sales slipped by 0.9 percent, Redbook reported, falling well short of a targeted gain of 2.3 percent. It was the first time in almost two months that sales failed to meet their target, suspending a brief turnaround in retail sales spurred by rebate checks and the Back-to-School season.
"The pace of sales growth continued to run below expectations," said Levis. "Most retailers were impacted by Tuesday's tragic events and closed on that day. Even after stores reopened, some merchants experienced increasing customer traffic while buying was down."
Making matters worse, said Levis, "tropical storm Gabrielle slashed and swamped northern and central Florida, leaving 570,000 homes and businesses in the dark. To a lesser extent, some stores last week may have been negatively affected by mismatched comparisons with last year's Labor Day." The declining trajectory in retail sales raised concerns, Levis noted, about the outlook for the rest of September.
When consumers were buying, she said, "People were stocking up on emergency items such as candles, flashlights, fuel, bottled water and personal care products. Leading merchandise categories for the week were groceries, flags, home furnishings and televisions."
Discounters, Levis noted, "continued to suffer less than stores dependent on discretionary spending. As a result of the month's performance to date, retailers may have difficulty meting their targets. Regionally, business continued to be strongest in the Northeast and Midwest, while the West Coast was the weakest performer. Many retailers hope that consumer spending will bounce back as the holiday shopping season draws nearer."
Taking it on the chin with the rest of American retailing, Wal-Mart, the world's largest retailer, said on a weekly conference call that sales for the week ran modestly below company projections. "Sales started the week at levels similar to August but were impacted by Tuesday's tragic events." Customer traffic peaked early on Tuesday shortly after the attacks on the World Trade Center and the Pentagon, as antsy consumers loaded up on essentials like bottled water, food and gasoline cans. But later in the day, traffic fell off sharply as fixated Americans remained glued to the TV and news reports of the disaster.
American flags were flying off the shelves, and Wal-Mart said it sold about 116,000 on Tuesday, up 18-fold from the same day the year before. And the next day, Wednesday, more than 200,000 flags were sold.
Sales over the weekend, Wal-Mart reported, returned to more normal levels.
Federated Department Stores said sales for the week ended Sept. 15 fell about $65 million beneath company forecasts due to the terrorist attacks and their impact.
And Sears, Roebuck and Co. said same-store sales in its department stores dropped about 50 percent the day of the attacks. Especially hard hit were stores in New York and New Jersey.
Redbook Retail Sales Average
Second week of September
|*Including chain stores and traditional department stores.
Source: Redbook Retail Sales Average, a unit of Instinet, a Reuters company.
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