Early January Retail Looks Solid

New York — Buoyed by shoppers who hit the malls to cash in the gift cards they received over the Christmas holiday, same-store retail sales moved up by 3.2 percent over prior-year levels during the first week of January, slightly ahead of a target of 3.1 percent growth, the Johnson Redbook Index reported.

Lifted by the gift card redemption, sales easily outpaced the smaller 2.6 percent increase recorded during the closing week of December. Measured on a month-over-month basis, sales came in 0.5 percent beneath December, slightly ahead of a projected 0.6 percent decline.

The greatest strength was seen in the nation's discounters, where same-store sales jumped up by 4.1 percent, slightly ahead of a planned 4.0 percent. Department store sales by contrast, grew less than half as fast, by 1.7 percent, but still nudged ahead of a target of 1.6 percent.

“Sales were on to slightly ahead of plan for most companies,” said Redbook analyst Catlin Levis, as “shoppers continue to redeem gift cards in the post-Christmas season.”

The analyst said, “As discounted winter goods thin out and full-price spring merchandise flows in earlier than usual, some fourth quarter margins remain under pressure in this promotional clearance and price-discounting environment.”

“Some retailers said it was mainly larger average purchases that had driven growth,” said Levis. “This may have been partly due to bigger-ticket items such as coats and electronics, but could also reflect gift card redemption and bargain-hunting by shoppers trained to defer expensive purchases until after the holidays.”

The analyst commented, “Discounters reported that consumption patterns had reverted to more normal patterns, with a focus on basic commodities and food.”