Nov. sales open soft as discounters suffer

By Don Hogsett -- Home Textiles Today, 11/13/2000 12:00:00 AM

NEW YORK -In one more disconcerting sign of a muted outlook for the all-important holiday season, retail sales came in well beneath plan for the first week of November, especially at the nation's discounters, according to the widely watched Redbook Retail Sales Average.

Overall, same-store sales improved by 2.4 percent during the month's first week, far beneath the 3.4 percent target, the Redbook reported.

While broadline retailers, including department stores and chains, were virtually on plan with a 0.9 percent increase, compared with a targeted gain of 1.0 percent, discounters disappointed once again. Same-store sales at the nation's big mass merchants moved up by 3.2 percent during the opening week of the month, well beneath a target of 4.5 percent.

"The month's soft opening was primarily due to weakness in the discount store sector," said Redbook analyst John Pitt. "This group was dragged down by bellwether retailers like Wal-Mart and Kmart, both of which missed target. This was primarily due to lower customer counts, since average tickets were reportedly up on last year. And sell-through of Halloween merchandise, mainly candy, was strong. The discount stores failed to make plan against a November target which is the lowest in several years, despite the relatively easy comparison against last year's warm November."

Broadline retailers, including department stores and chains, were "essentially on plan after the first week, despite mixed results," said Pitt. "This group's November plan is in line with recent monthly targets, although these have tended to be on the low side as well, reflecting expectations downgraded by the disappointing fall season."

Pitt suggested that the first week's results be interpreted cautiously. "November can be hard to read," he said. "It is a transitional month in which retailers clear unsold fall merchandise and prepare for the holiday season and, more importantly, is significantly backloaded, with as much as a quarter of total business contributed in the few days following Thanksgiving. Thus, November's true trend may not be visible until the month is over."

November Off To a Slow Start

Source: Redbook Retail Sales Average unit of Instinet