Retail sales fall is worst in six years
Retail sales declined the most since February 2003 last week, a sign that steeper markdowns before and after Christmas failed to salvage what may be the worst holiday shopping season in four decades.
Sales at stores open at least a year fell 1.8% in the seven days through Dec. 27, the International Council of Shopping Centers and Goldman Sachs Group Inc. said Tuesday.
Consumers spent at least 20% less on women’s clothing, electronics and jewelry in November and December, pressuring retailers, including Macy’s Inc. and Talbots Inc., to mark down clothes and jewelry as much as 70% after the holiday.
That may further squeeze fourth-quarter profit margins.
“Fourth-quarter earnings for retailers will tank,” said Richard Hastings, a consumer strategist at Global Hunter Securities in Newport Beach. “I don’t think we return to normal next year.”
Sales for all of December may drop at least 1%, with “only a few bright spots,” such as Wal-Mart Stores Inc., “amid double-digit declines among a broad swath of the industry,” council economist Michael Niemira predicted. The trade group studies sales at about 40 chains.
Last week the New York trade group forecast sales for November and December would drop as much as 2%, marking the largest decrease since at least 1970, when the group started tracking shifts from the previous year.
The holiday shopping season accounts for as much as 35% of annual sales, according to the National Retail Federation industry group.
The Johnson Redbook Index, another measure of retail performance, fell 0.4% last week compared with a year ago as a last-minute Christmas rush failed to counter sluggish pre-holiday sales and winter storms, New York-based Redbook Research Inc. said. The report measures sales at about 9,000 stores.
Online spending declined 3% in the holiday season compared with last year, research firm ComScore Inc. said.
Consumers spent $25.5 billion over the Internet from Nov. 1 through Dec. 23, compared with $26.3 billion a year ago, the Reston, Va., company said.
