December 29, 2004
Christmas Week Sales Soar; Jewelry a Top Category
Last-minute, pre-Christmas shopping resulted in the strongest weekly gain in comparable retail sales seen since July, according to the International Council of Shopping Centers, a New York City-based trade group. Comparable sales or sales at stores open at least a year, a key measure of retail performance rose 4.3% year-over-year for the week ended Dec. 25, according to an index of 75 major chains compiled by ICSC, reports Dow Jones Newswires. Strong categories included jewelry, winter clothing and electronics.
As a result, retail chains are likely to meet lowered expectations for the season, says Michael Niemira, chief economist and director of research at ICSC. "Although holiday sales were slow and uneven for most of the season, last-minute shoppers were out in force last week," Niemira says.
Other retail groups tracking consumer spending also credited last-minute buying with a boost for the industry. ShopperTrak, surveying more than 40,000 retail outlets, showed an 11.6% increase in sales for the week that ended Saturday from the same time a year ago.
ICSC's Niemira says he expects December's comparable sales to rise 3% to 3.5%, and backed his earlier forecast for sales during November and December combined to increase 2.5% to 3%, versus a 4% increase last year. That holiday forecast had been lowered from an initial estimate for a 3% to 4% gain after retailers reported a disappointing increase of 1.8% in November.
Shoppers increasingly procrastinate on their holiday purchases with each new season, creating more uncertainty about what the final numbers will be, said Jeffrey Klinefelter and Neely Tamminga, analysts at Piper Jaffray Co. in Minneapolis. They noted that, in addition to last-minute shopping, consumers increasingly are turning to gift cards, which can push the recognition of holiday revenue farther out still. "Sales of gift cards aren't recognized until they are redeemed," the analysts said.
An index compiled by Piper Jaffray currently expects comparable sales in December to increase 2%, versus a 3.9% gain last year. The firm predicts mass merchants like Wal-Mart Stores Inc.and Target Corp. will post a 2% gain versus a 4% increase last year. Specialty apparel chains such as Gap Inc., and teen and women's apparel chains like Urban Outfitters Inc. and Ann Taylor Stores Corp. collectively will post slightly more modest comparable-sales increases, the firm predicts.
In anticipation of December retail sales reports, slated for release next week, other industry surveys generally have predicted solid, if not spectacular, results. The National Retail Federation, a Washington, DC, trade group, expects holiday sales to be up 4.5% versus a 5.1% increase last year.
Over the weekend, MasterCard Advisors said holiday spending rose 8.1%, although that figure incorporates additional online sales and sales of gift cards, as well as the increased use of credit over cash. The consulting unit of MasterCard International said sales were driven by higher-income consumers, and that sales of apparel and home furnishings outpaced sales of books, music and videos.
Visa USA said spending on Visa-branded payment cards rose 31.8% to $25.4 billion between Dec. 20 and Dec. 26, more than doubling the growth rate of the previous week. Discounters, mass merchants and drugstores drove the increase with a 48.2% gain, Visa USA said.
Wal-Mart said its comparable sales are currently on track to increase about 2% for December, while Amazon.com Inc. said this year was its busiest holiday ever. ComScore Networks Inc., a Reston, VA, market research firm, said it expects Internet sales to increase 28% this year to $15.5 billion.