The retail industry received the “gift” for which it had hoped during the week before Christmas – millions of consumers who had been procrastinating on gift buying were drawn into stores by countless last-minute sales and great weather. According to ShopperTrak, sales during the week leading up to Christmas skyrocketed by 14.8%… and the trend continued upward on the 26th, which showed sales higher by 25.5%! According to ShopperTrak Founder, Bill Martin: “Consumers are willing to get up and go out if they feel like they’re going to get some value for their dollars.” https://news.fidelity.com/news/news.jhtml?cat=Top.Investing.RT&articleid=201112281307RTRSNEWSCOMBINED_TRE7BR0YN_1&IMG=Y
Regarding the entire Holiday Shopping Season, the International Council of Shopping Centers indicates that it will stick with its September forecast for holiday sales growth – which it had pegged at 3.5%. Commenting on the positive wrap-up of the economically important December retail sales period, ICSC Chief Economist, Michael Niemira said: “The finish is solid and the season itself was good. November was on the soft side, but December will be better.”
Reports indicate that the largest area and regional shopping malls were blessed with the strongest flows of customer traffic since the beginning of 2011. Evidently, activity in electronics and department stores was positive, resulting in good sales figures.
Summarizing highlights within retailer sectors, Niemira observed: “Major players, such as Macy’s, are fine. Specialty stores are likely to be more uneven. Specialty apparel seems to have been hit by abnormally warm weather. Sales were on the slow side, and there has been more discounting consequently.”
It is apparent that the “warm weather” phenomenon thus far this winter has been a true “ying and yang” for retailers. The warm weather drew shoppers out in droves to shop; however, the absence of the usual degree of cold and snow has led to the postponement of the typicall level of winter outerwear purchases… putting pressure on merchants with heavy inventory of such items. This led to significant levels of discounting on outerwear, which will hurt the “bottom line”.
Two other trends continued:
1) Some bricks-and-mortar stores continue to struggle with the daunting challenge of catching up with rapidly evolving retail trends and consumer expectations. Borders Group and Filene’s Basement filed for bankruptcy earlier during 2011; and now, Chicago-area based Sears Holdings Corp. announced just after Christmas that its holiday sales suffered so badly that Sears will be closing 100-120 low performance stores during the weeks ahead.
2) Meanwhile, online sales continue to thunder ahead, leading many to speculate regarding the degree to which online retailers are endangering the existence (much less the growth) of some brick-and-mortar retail companies. From November 1 through December 26th, online sales zoomed to a record $35.27 billion – up 15% versus the same period in 2010.