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Soft Finish to Holiday Season

Maybe it was the weather, or maybe consumers just weren't in the mood, but sales in the all-important Christmas season, when U.S. retailers make most of their money, were spotty to soft — despite heavy promoting and markdown activity that started off the season on Black Friday, the day after Thanksgiving.

Indeed, in many cases December same-store sales came in beneath November levels. While Federated December comps rose by 4.4%, that was only half the size of the 8.5% increase put up the month before. Ditto Target, where December same-store sales rose by 4.1%, well behind a 5.9% increase in November. Kohl's comps rose by 3.0%, lagging the 3.7% increase of the month before.

Federated did stress the positive: "While December sales were somewhat softer than expected, we overcame unseasonably warm weather in most of the country and ended the month strong. Performance in former May Company stores improved in December from the October/November trend," said Terry Lundgren, Federated chairman, president, and ceo.

"Home merchandise categories showed continued progress in December, although the business remained weak in former May Company locations," Lundgren added.

Apart from Federated, few retailers had anything to say about home fashions, and those who did said business was soft. Even though furniture was among the best selling categories at Bon-Ton Stores, soft home was among the "weaker performing categories," said Anthony Buccina, vice chairman and president of merchandising.

Same-store sales in U.S. Wal-Mart stores, while improving, remained soft, and lagged far behind sales at sibling Sam's Clubs. December comps rose by 1.3% in Wal-Mart Stores, improving after a 0.5% decline in November. But Sam's remained the strongest performer; comps rose by 3.5%, almost doubling the 2.0% gain of the prior month.

As in recent months, stores with the strong value proposition of upscale brands at good prices, trumped the everyday-low-price merchants like Wal-Mart. Leading the group of retailers tracked each month by HTT was Costco with its 9.0% December comp increase, with TJX not far behind with a 6.0% gain.

Winners and losers
Same-store sales % change

Winners
Costco 9.0%
Dollar General 7.1
TJX 6.0
Federated 4.4
Target 4.1
Losers
Pier 1 -10.7%
Hancock Fabrics -7.2
Jo-Ann Stores -6.9
Dillard -5.0


December sales for key retailers
Five weeks ended Dec. 31a(dollar amounts in millions)

2006 sales 2005 sales Total % chg. Same-store %chg.
a. Reporting periods vary from store to store.
b. Including Carson's
c. Total sales were reduced by the closing of 78 duplicative stores following the May Department Stores acquisition.
d. Lower sales reflect the sale of all of the company's department stores.
e. For the18 weeks year-to-date of the fiscal year.
f.Hancock total sales were reduced by the closing of 43 stores.
BJ's Wholesale Club $1,014.4 $965.6 5.0 0.6
The Bon-Ton Stores b $642.0 $259.9 147.0 0.3
Costco $7,240.0 $6,370.0 13.7 9.0
Dillard Dept. Stores $1,226.2 $1,270.3 (3.5) (5.0)
Dollar General $1,180.0 $1,050.0 12.1 7.1
Family Dollar $850.7 $804.9 5.7 1.2
Federated c $4,997.0 $5,459.0 (8.5) 4.4
Fred's $221.5 $204.7 8.2 2.0
Gottschalks $133.1 $131.5 1.2 2.1
Hancock Fabrics f $41.8 $48.3 (13.5) (7.2)
JCPenney $3,366.0 $3,253.0 3.5 NA
Dept. stores $2,955.0 $2,836.0 4.2 2.6
Catalog/e-commerce $411.0 $417.0 (1.4) NA
Jo-Ann Stores $257.5 $273.5 (5.9) (6.9)
Kohl's Corp. $2,761.0 $2,481.8 11.2 3.0
Pier 1 Imports $242.5 $272.3 (10.9) (10.7)
Ross Stores $729.0 $672.0 8.5 2.0
Stein Mart $216.2 $211.8 2.1 0.0
Target Corp. $9,254.0 $8,420.0 9.9 4.1
TJX Cos. $2,500.0 $2,300.0 10.0 6.0
Wal-Mart Stores Inc. $43,996.0 $40,450.0 8.8 1.6
Wal-Mart Stores $28,795.0 $27,920.0 3.1 1.3
Sam's Club $4,861.0 $4,605.0 5.6 3.5
48 WEEKS YEAR-TO-DATE
BJ's Wholesale Club 7,619.0 7,260.0 4.9 1.1
The Bon-Ton Stores b 3,121.7 1,224.4 155.0 0.3
Costco e $22,230.0 $20,220.0 9.9 6.0
Dillard Dept. Stores $7,022.2 $7,053.3 (0.4) (1.0)
Dollar General $8,500.0 $7,820.0 8.5 2.9
FamilyDollar e $2,450.9 NA 5.8 1.0
Federated c $25,190.0 $20,895.0 20.6 4.1
Fred's $1,600.0 $1,470.0 8.8 2.4
Gottschalks $640.4 $641.0 (0.1) 0.6
Hancock Fabrics f $353.2 371,4 (4.9) (1.8)
JCPenney $18,511.0 $17,687.0 4.7 NA
JCPenney stores $15,799.0 $15,045.0 5.0 3.7
Catalog/e-commerce $2,712.0 $2,642.0 2.6 NA
Jo-Ann Stores $1,693.0 $1,742.0 (2.8) (5.8)
Kohl's Corp. $14,552.7 $12,725.8 14.4 5.7
Pier 1 Imports $1,392.0 $1,543.0 (9.8) (11.4)
Ross Stores $5,171.0 $4,655.0 11.1 4.0
Stein Mart $1,401.2 $1,401.4 0.0 (1.2)
Target Corp. $52,982.0 NA 11.1 4.8
TJX Cos. $16,400.0 $15,000.0 9.0 4.0
Wal-Mart Stores Inc. $320,388.0 $287,065.0 11.6 2.0
Wal-Mart stores $209,592.0 $194,861.0 7.6 1.8
Sam's Clubs $38,607.0 $36,939.0 4.5 2.9


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