Retail Sales Pick Up Late in November
Sales for the nation’s largest general retailers continued at their now-familiar sluggish pace in November, but industry observers said Thursday that a pickup late in the month augured well for the Christmas shopping season.
“The first part of November was relatively weak, so as a result we’re seeing a mixed bag,” Walter Loeb, a retail industry analyst with the investment firm Morgan Stanley & Co., said after reviewing the retailers’ November sales figures.
However, Loeb said, “based on the end-of-the-month results, one could project we’re going to have a moderately strong Christmas season.”
Jeffrey Feiner, an analyst with Merrill Lynch & Co., said sales tallied after the November reporting period--which ended Nov. 26 for most retailers--showed a modest improvement, “leading us to the general conclusion that Christmas sales will be reasonably healthy.”
Jeffrey Edelman, an analyst with Drexel Burnham Lambert Inc., was more conservative in his assessment of post-Thanksgiving sales, saying, “I’m not so sure we would say it was a good or super weekend.”
Many analysts predict retailers will have a 6% overall increase in Christmas sales from last year. But Joseph Ronning, an analyst with Brown Bros. Harriman Inc., warned that the sales improvement might look better than it was because results last Christmas were disappointing.
The holiday period is crucial for retailers because they earn about half their annual profits at this time. However, even if sales are sluggish, profits should improve in the fourth quarter because retailers are keeping their inventories tight, Ronning said.
Retailers have had sluggish sales for nearly two years as consumers have paid more for necessities and services and tried to reduce their high debt levels. Analysts and economists expect this trend to continue into 1989.
Apparel retailers, who have had a year-long sales slump, continued their comeback last month. Limited Inc., a leading specialty apparel retailer, reported that its overall November sales rose 25% while sales at stores open at least a year--known as same-store sales in the industry--picked up 18%.
“Overall, their business appears to be healthier,” Edelman said of the apparel retailers, which saw sales drop off last year because women rejected the latest styles.
The nation’s largest retailer, Sears, Roebuck & Co., said its overall sales were up 8.8% last month and 6.2% for the first 43 weeks of the fiscal year. Sears’ same-store sales rose 4.4% in November and 2.3% for the year so far.
Retailers and industry analysts believe same-store sales are a more accurate measure of a company’s performance than figures that include sales from new stores. Not all retailers report same-store sales.
MAJOR RETAILERS’ SALES IN NOVEMBER
In millions % of dollars 1988 change Sears 2,999 +8.8 K mart 2,258 +5.5 J.C. Penney 1,391 -1.8 May Dept. Stores 1,120 + 19.7 Dayton Hudson 1,110 +7.0 Wal-Mart Stores 2,075 +30.0 Woolworth 365.0 +9.3 Montgomery Ward 478.3 + 7.8 Carter Hawley Hale 253.5 + 2.6
* Excludes foreign sales.
