Credit cards and dollar bills remained zipped within the wallets of US consumers during the holiday season, according to the latest data which indicates sales growth at its lowest level for many years.
The gloom was exemplified at Federated Department Stores whose Macy’s and Bloomingdale’s outlets recorded sales 4.5% down year-on-year during November and December, The group had forecast sales would at best be flat, at worst down 2.5%.
Federated, along with other disconsolate stores, pointed the finger at aggressive discounting by superstore operators such as the globe’s largest retailer Wal-Mart.
But on Monday even the latter reported sales below expectations. Total US same-store sales for the five weeks ended January 3 were predicted to be up by between 2%-3% per cent compared with its earlier forecast of 3%-5%.
Bucking the trend, however, is J C Penney whose department stores remained in recovery mode and out-performed rivals. December sales are expected to exceed earlier estimates by 4.5%.
But hopes were dashed that a robust retail performance over the holiday season (Thanksgiving through Christmas) would signal a return to national growth. Observed UBS Warburg analyst Richard Jaffe: “Overall holiday shopping and mall traffic was slow to pick up and didn't result in a big last-minute surge as anticipated.”
At Merrill Lynch, retail analyst Daniel Barry was in full Cassandra mode: “We believe most broadline retailers missed their Christmas sales plans, and we expect sales and profit warnings over the coming weeks.”
And to underscore the entrail-rakers’ gloomy prognostications, Chicago-based retail researcher ShopperTrak RCT, which garners data from 30,000 outlets, reports holiday period sales down year-on-year by 11% to $113.1 billion (€107.97bn; £70.25bn). Even Christmas Eve sales dipped by one percent.
Data sourced from: Financial Times; additional content by WARC staff