Retailers rebound slightly in October
November 9, 2001,
New York — Facing a list of challenges that seems to grow longer each week, retailers rebounded a bit from September, with same-store sales climbing 1.3 percent for October.
However, in addition to the slumping economy and the fallout from the September terrorist attacks, chain stores still have to deal with sagging consumer confidence on the cusp of the holiday season.
Value-oriented retailers were not surprisingly among the winners last month, as consumers became more discriminating about how they spent their money. Costco, Dollar General, Family Dollar, the Target division of Target Corp., and all of Wal-Mart's divisions posted single-digit increases in comp-store sales, as well as double-digit increases in overall sales.
Other chains that accomplished this were Jo-Ann Fabrics, Pier 1 Imports, and TJX. Kohl's showed double-digit increases in both categories.
Unfortunately, times are tougher for department stores. Marshall Field's, Federated's department stores, Elder-Beerman, May, Saks Inc., and Sears (tied with discounter Kmart) pulled the worst comp-store sales in the chain stores group for October, respectively.
Elder-Beerman noted that October sales were affected by the shift of a major sales event from October 2000 to September 2001, and the total combined sales for September and October provide a better comparison to 2000, which would show a sales decrease of 0.3 percent and comp-store decrease of 3.9 percent.
Saks Inc.'s Saks Department Store Group cited home as showing weaker sales performances last month.
And though Family Dollar had a strong month, with a 15.8 percent sales increase and a 6.2 percent comp store sales increase, that was mainly due to its hardlines, which grew about 8.2 percent, while softlines declined about 0.3 percent.
For other chain stores, however, the home category was a plus. JCPenney said home furnishings was one of the best performers last month, along with apparel and men's. Ross Stores saw the home category earn mid-single-digit growth.
At TJX's MarMaxx Group — the umbrella for T.J. Maxx and Marshalls — home outperformed apparel on a comp basis, with home comps up 6 percent and apparel up 3 percent. In addition, TJX's HomeGoods unit saw its comps climb 12.0 percent, ahead of plan.
Pier 1 Imports, with a 12.2 percent sales gain as well as comp-store sales growth of 4.0 percent, believes that home will perform well over the next few months, said Marvin Girouard, chairman and ceo.
In addition, Kmart noted that in October 2000, it liquidated more than $52 million worth of discontinued inventory, which accounted for 2 percent of its same-store sales that month. Excluding the effect of those liquidation sales, Kmart's same-store sales for October 2001 would have improved by 200 basis points.
"Our sales mix was healthier this year, with an increase of more than 10 percent in regular-priced merchandise compared to last year, reflecting our launch of BlueLight Always and a significant reduction of print media," said Chuck Conaway, chairman and ceo. "In addition to the weaker Halloween sales, as some communities scaled back trick or treating, we moved our very important toy catalog promotion into November, for a higher return on capital."
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