The holiday shopping season ended better than it started, and most retailers are on track to meet humble sales goals, though many still hope for an extra boost this week as consumers...
The holiday shopping season ended better than it started, and most retailers are on track to meet humble sales goals, though many still hope for an extra boost this week as consumers cash in gift cards.
Wal-Mart, which got off to a slow start, said yesterday December sales would come in at the midpoint of its modest forecast, thanks in part to brisker-than-expected business the day after Christmas.
Discount rival Target said late yesterday it is on plan to meet its December same-store sales forecast of an increase of 3 to 5 percent. Same-store sales, those at stores opened at least a year, are considered the best indicator of a merchant’s health.
J.C. Penney expects same-store sales to rise by single digits for the combined November and December period.
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Sharper Image, meantime, reduced its earnings outlook for the fourth quarter and full year due to disappointing holiday sales that were marred by inadequate inventories.
“It came down to the wire, and last week was particularly strong,” said Michael Niemira, chief economist at the International Council of Shopping Centers.
“Even if it comes in where we expect, it is still a modest performance,” he added. “But it is still better than what we had feared two or three weeks ago.”
Niemira said he is more confident the International Council of Shopping Centers-UBS sales tally for the combined November and December period will be up from 2.5 to 3 percent.
He had originally projected an increase of 3 to 4 percent.
Still, with gift cards popular, many merchants are relying even more on the week after Christmas, hoping consumers will spend them immediately. Gift cards are recorded as sales only when they are redeemed.
The National Retail Federation estimated $17.24 billion worth — roughly 8 percent of holiday sales — will be sold in gift cards this season.
The industry association is sticking with its forecast of a 4.5 percent gain in total sales for November and December. That excludes restaurant and auto sales.
Online sales strong
Other bright spots this season have been online shopping, with sales beating projections, and luxury stores, which have maintained robust sales.
Mid- to low-price stores, whose customers are more vulnerable to the economy’s woes and had pushed hard with discounts, further sweetened the deals on the day after Christmas, offering savings of up to 75 percent.
Wal-Mart, which had approached the season aiming to be less aggressive in discounting than a year ago, had to step up price cutting amid disappointing sales.
Yesterday, Wal-Mart reported strength in both food and general merchandise for the week ended Friday.
Sales of gift cards were up significantly over last year, it said.
Still, December’s same-store sales gains will be modest, hitting a midpoint between 1 and 3 percent.
Lisa Gibbons, a spokeswoman at Sears, said the company was pleased with traffic last week and the day after Christmas. Hot sellers were apparel, fine jewelry and electronics.
Gibbons declined to discuss forecasts.
Not everyone smiling
Sharper Image said yesterday holiday business was hurt because of stocking issues with holiday items, slow customer traffic, weaker Internet sales and weak response to catalog and direct marketing.
“Overall, our sales this holiday were disappointing,” said CEO Richard Thalheimer.
He noted that through Dec. 24, company sales rose 4 percent, excluding wholesale figures.
That is trending below the company’s expectations for an increase in total sales of 15 to 18 percent for the fourth quarter.
Sharper Image same-store sales are in line with its forecast of mid-single digit declines from a year ago.
The full picture for the holiday season won’t be known until Jan. 6, when retailers report December sales figures.
According to the International Council of Shopping Centers, the seven-day period ended Dec. 27 accounted for 20.6 percent of holiday sales in 2003, up from 19.6 percent in 2002.
The seven-day period ended Jan. 3 accounted for 14.1 percent in 2003, up from 12.8 percent in 2002.