The nation’s retailers suffered miserably through November as a modestly positive start to the holiday shopping season wasn’t strong enough to offset weak spending the rest of the month.
After posting two consecutive monthly sales gains after more than a year of declines, merchants collectively posted a surprise 0.3 percent decrease for November, compared with a year ago when business plummeted to historic lows as spooked shoppers clamped down after the financial meltdown. The sales decrease is an ominous sign for an economy in the early stages of a fragile recovery.
Now, the big worry is whether consumers won’t go back to the stores until the final hours before Dec. 25 as they wait for even bigger discounts in a season that many analysts had hoped would generate sales that would be unchanged from a year ago.
According to sales results announced Thursday, most stores including department store chains Macy’s Inc.,Children’s Place Retail Stores Inc., teen merchant Abercrombie & Fitch Co. and discounter Target Corp. posted sales declines.
Warehouse club operator Costco Wholesale Corp. posted a sales gain, though it’s smaller than expected. Another exception was Limited Brands Inc., which runs Victoria’s Secret and Bath & Body Works. It reported a solid sales gain instead of the sales decrease that Wall Street projected.
The figures are based on sales at stores open at least a year and are considered a key indicator of a retailers’ health because they exclude the effects of store expansions or closings.
The 0.3 percent drop, according to the International Council of Shopping Centers-Goldman Sachs Index, is far worse than the original 5 to 8 percent growth forecast, which was whittled down to 3 to 4 percent gain earlier this week. The weak results come on top of a 7.7 percent drop a year ago.
“This suggests that consumers are still under a significant amount of pressure from unemployment and job worries,” Ken Perkins, president of retail research firm Retail Metrics. (AP)
