retail

December Sales Solid, Not Stellar

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Santa brought the nation’s largest retailers respectable, though not stunning, sales results, with clothing and upscale chains doing better than expected. Nordstrom and Macy’s were among the strong performers, while Target, the Gap and Kohl’s achieved disappointing results.

Overall, December sales rose 3.6%, according to Kantar Retail, up a bit from the 3.1% same-store sales gain reported in November, and higher than the 3.2% gain in December of last year. And the International Council of Shopping Centers, which reports on a slightly different group of stores, says its index rose 3.5%. (For the combined November-December holiday period, the index rose 3.3%.)

“The holiday results reflect trends we can continue to expect into the New Year,” writes Kantar’s senior economist, Frank Badillo, in its report. “We’re seeing weak-to-modest growth overall that hides pockets of strength skewed toward upscale retailers and value-focused retailers that win over shoppers at the expense of their competitors.”

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Macy’s was among the stand-outs, with sales gaining 6.2%: "December sales continued very strong at Macy's and Bloomingdale's, and we are solidly on track to exceed our expectations for same-store sales in the fourth quarter,” the company says. (Separately, it announced plans to close nine underperforming stores by early spring.) And at the Seattle-based Nordstrom, results gained 8.7%.

There was less ho-ho-hoing at Target, though, where same-store sales increased just 1.6%. “December sales were below our expectations, as growth in grocery and beauty offset softness in electronics and music, movies and books," CEO Gregg Steinhafel says in its release. "Sales and traffic were strongest in the week leading up to Christmas as guests waited to shop for last-minute gifts. In 2012, we’ll continue to pursue initiatives designed to deliver compelling value and a superior shopping experience against the backdrop of continued slow and volatile economic growth.”

Results at JC Penney were basically flat, with a 0.3% gain. And at Kohl’s, sales actually declined 0.1%, while same store sales at the Gap fell 4%.

“There was a lot of unevenness across the segments in December which curbed growth, but looking at the month from an overall standpoint the performance was good relative to its long term trend,” says Michael P. Niemira, the ICSC’s chief economist for ICSC, in its report. “Unfavorable weather throughout the holiday shopping season was cited by many apparel retailers as a reason for softer demand, which ultimately led to an increase in discounting and some profit warnings.  Additionally, our surveys suggest that gift-card purchases were higher this season, which may have limited the December performance, but bodes well for future demand.”

ICSC says it expects January sales to gain about 3%.

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