Retailers, consumers and prices
Check Out Line: Holidays not looking so holly, jolly
Check out the lackluster start to the holiday season for major U.S. retailers.
The Thomson Reuters same-store sales index rose 0.5 percent in November, while Wall Street experts had been expecting 2.1 percent growth, and 81 percent of companies missed expectations.
Talk about shaking Wall Street’s optimistic belief that this year’s holiday shopping season would be off to a much stronger start than in 2008, when the global economy seemed to be in free fall.
Youth apparel chains such as Abercrombie & Fitch and American Apparel posted some of the most disappointing results, though department stores such as Macy’s and Dillard’s also fell short of expectations. And upscale retailers such as Saks took an unexpectedly large hit, with sales at established stores falling 26.1 percent in November.
The retailers blamed everything from the weather to the timing of sales to explain the disappointing November sales. For example, TJ Maxx and Macy’s both blamed a warm November (though blaming the weather seems to be the retail industry’s version of the “My dog ate my homework” excuse) and Saks said a clearance event that had taken place in November last year was taking place in December this year.
But the tepid start to the holidays may leave some retailers no choice but to offer steeper discounts if they want December to save the season, according to some analysts.
“The consumer is delaying purchases to see if there will be better deals in December,” said Michael Dart, a partner at retail consulting firm Kurt Salmon Associates’ private equity practice. He predicts retailers will respond with more discounts though not as steep or across as many product categories as last year.