November Gains Modest, But Brisk Holiday Sales Still Seen
Undated (AP) _ The nation’s largest general merchandisers reported unexpectedly modest sales gains in November, but industry officials and analysts said Thursday they still look for holiday sales to be brisk.
Industry leader Sears, Roebuck & Co. said its November sales rose 2 percent from a year ago, while J.C. Penney Co.’s sales inched up 1.2 percent.
K mart Corp. posted a 7.3 percent gain, but said sales from its stores open at least a year rose only 3.4 percent from November 1985.
Wal-Mart Stores Inc., which has been expanding aggressively, said its sales last month jumped 38 percent but sales from stores open a year or more climbed 11 percent.
The industry had expected a stronger overall showing in November - which includes the popular shopping day after Thanksgiving - particularly in light of a sizable sales pickup in October.
The small gains last month probably reflected ″the sluggish economy and perhaps the last bit of a ripple effect from the strong auto sales″ in recent months, which raised many consumers’ debt loads and reduced their disposable income, said Jeffrey Edelman, an analyst with Drexel Burnham Lambert Inc. in New York.
Fred E. Wintzer Jr., an analyst with the brokerage firm Alex. Brown & Sons Inc. in Baltimore, said sales also were hindered by poor weather in several regions of the country in the last weekend of November.
Wintzer and others said it is becoming harder to judge holiday sales based on late-November activity because people appear to be increasingly delaying their Christmas shopping.
″They seem to be putting it off a little more every year,″ Wintzer said. ″Why? I don’t know, but early readings aren’t as accurate as they used to be.″
Nonetheless, Jeffrey Feiner, who follows retailing for the brokerage firm Merrill Lynch & Co. in New York, said indications since Thanksgiving show ″relatively favorable sales trends″ that should produce sales gains of between 6.5 percent and 7 percent for the holiday season.
Other analysts have predicted gains of between 6 percent and 8 percent or the period.
Holiday sales in the five weeks after Thanksgiving are particularly crucial to the stores because the sales can account for up to half of their full-year performance.
Sales overall at general merchandisers, which include department, discount and speciality stores, give an indication of consumer spending, which has a substantial impact on overall economic activity.
The government releases a broader report on sales by all retailers, such as car dealers, restaurants and suprmarkets, about a week after the big general merchandisers announce their results.
Analysts said one factor fueling recent sales has been continued price discounting by the retailers, which is putting downward pressure on the stores’ profit margins. But the analysts also said the stores have their inventories and costs more in line with sales than a year ago, and thus many retailers are expected to post fourth-quarter profit gains of 10 percent or more.
Sears said its November sales rose to $2.74 billion from $2.69 billion, while year-to-date sales also gained 2 percent, to $23.6 billion from $23.1 billion.
K mart’s total sales for November climbed to $2.04 billion from $1.90 billion, and 10-month sales rose 7.7 percent to $18.9 billion from $17.6 billion.
Here are the results of other big retailers, which includes sales from stores open less than a year:
-Penney’s November sales from its stores and catalog department edged up to $1.36 billion from $1.34 billion, while year-to-date sales climbed 5.4 percent to $10.2 billion from $9.68 billion.
-Wal-Mart’s sales last month surged to $1.27 billion from $925 million; year-to-date sales rose 41 percent to $9.34 billion from $6.60 billion.
-May Department Stores Co.’s November sales rose 7.6 percent to $1.01 billion from $940 million, and 10-month sales gained 9.5 percent to $7.94 billion from $7.25 billion.
-Dayton Hudson Corp. sales last month rose 13.4 percent to $949.6 million from $837.8 million, while sales from stores open a year or more rose only 4.8 percent. Year-to-date sales increased 11.5 percent to $7.29 billion from $6.54 billion.
-Federated Department Stores Inc. said November sales from its general merchandise operations rose 5.8 percent to $812.4 million from $768.2 million, while 10-month sales were up 4.9 percent to $6.53 billion from $6.23 billion.
-F.W. Woolworth & Co. said last month’s sales were up 3.8 percent to $580 million from $559 million; year-to-date sales rose 8 percent to $5.09 billion from $4.72 billion.