December off to slow start for key retailers

Don Hogsett, December 11, 2000

NEW YORK -In one more unnerving sign that the all-important holiday season is headed toward one more disappointing fizzle, same-store sales at key retailers grew just 2.2 percent during the first week of December, well below a target of 3.1 percent, according to the widely watched Redbook Retail Sales Average.

Putting those disappointing numbers into perspective, this year's gain of 2.2 percent was less than half of the 4.5 percent increase recorded in the same period a year ago.

And the pain was equally distributed among the various channels of distribution, with national and regional discounters falling shy of sales targets as well as their broadline peers, the department stores and chains.

"Sales were mixed in the first week of December but below plan overall," said John Pitt, Redbook analyst. "Retailers said average transaction tickets were generally ahead of last year, but customer counts were down."

After a stunning start to the holiday season with an unusually strong Thanksgiving weekend, the pace of sales was expected to cool, but the drop-off was greater than anyone had anticipated, Pitt observed. "Traffic was expected to thin after the record levels of the Thanksgiving weekend, and retailer plans for the first week would have reflected this, but the slowdown was greater than expected."

Clouding the crystal ball, and making it tough to set realistic targets or forecast the rest of the month, are a number of complicating factors, including big shifts in the calendar, said Pitt. "The month is back-loaded by the increasing consumer tendency to shop either at the last minute before the holiday or in the week after Christmas; the Hanukkah holiday falls later this year than last; and December contains two additional pre-Christmas shopping days compared to last December, a significant positive distortion for certain retailers. These factors make it difficult to call the trend until the month is more advanced."

Departments stores and chains reported especially disappointing results, with their slender gain of 0.8 percent coming in shy of a 1.2 percent target and a strong year-ago increase of 5.9 percent. Discounter sales advanced by 2.8 percent but still came in short of a 4.1 percent target. On a more positive note, discounter sales climbed almost twice as fast as last year's pace of 1.5 percent.

"Merchandise drivers reflected format specialties as seasonal apparel dominated sales at broadline stores, while discounters focused on consumer electronics, consumables and household goods," said Pitt. "Sales-leader lists did not feature toy and gift categories as strongly as might be expected at this time of year, another possible indication of consumers deferring holiday shopping per se until the last minute."

Same-store sales, first week of December

Retail Segment Week ended 12/2 Targeted gain Year-ago 12/4/99









Total Retail




*Including department stores

Source: Redbook Retail Sales Average unit of Instinet

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