November Retail Sales Strong; Outlook Bullish For '07

Retailers reported a much stronger-than-expected November showing yesterday.

The U.S. Census Bureau announced that estimates of U.S. retail and food services sales were up 1% from October, and 5.6% ahead of last November. The sales gains topped what most economists had been predicting, and bode well for the remainder of the holiday shopping seasons. For the September through November 2006 period, sales were up 5.3% from the same period a year ago.

Among the brightest spots: Sales at health and personal care stores jumped 8.7% from last November, sales at electronics and appliance stores increased by 8.6%, and sales at sporting goods, hobby, book and music stores grew by 7.3%. At clothing and accessory stores, sales gained 6.7%.

Only two categories registered declines from last November: Sales at department stores--which some analysts had been predicting were making a big comeback--actually fell 2.1%. And sales at gasoline stations fell 2.3%.

And the chief marketing officers at the nation's leading retailers expect all that Christmas cheer to spill over into next year, according to BDO Seidman, the professional services firm.

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"CMOs at leading U.S. retailers are very optimistic about the U.S. economy and their companies' sales outlook for the coming year," the company said in its latest Retail Compass survey.

"Almost two-thirds (64%) of the marketing executives indicated they are more optimistic about the U.S. economy than they were a year ago and more than three-quarters (78%) of the CMOs feel their companies' sales performance in 2007 will be stronger than 2006," the survey said.

Major worries include rising energy costs and interest rates, as well as the slow housing market. But overall, "the retail CMOs predict an average year-over-year sales increase of 8.6% in 2007. Given the strength of retail sales growth in the first half of the year--the biggest gains since 2000, according to the Commerce Department--and the strong start to the 2006 holiday shopping season, U.S. retailers are riding a wave of confidence as we enter 2007."

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