The nation’s big retailers today posted mediocre November sales results, but in a favorable omen for the holiday season, selling picked up late in the month.
The tallies provided the first glimpse of how retailers are doing at their most important time of year. Most of the reports included sales during part of the Thanksgiving weekend, when shoppers typically begin buying holiday gifts.
“I think it’s touch and go. A lot of the discounters and big department stores have serious concerns for good reason,” said Gary Saunders, a retail analyst for the investment firm Josephthal & Co. “The likelihood is that it’s going to be a very tough Christmas.”
Clothing stores fared better than general merchandise chains, continuing a pattern that has persisted almost all year.
Costly goods intended to last for several years, such as refrigerators or carpeting, moved the slowest and stores that emphasize such durable merchandise had the poorest news.
“The November sales results showed modest gains, with spending on durable goods continuing to be quite weak,” said Merrill Lynch & Co. analyst Jeffrey Feiner. “There was some noticeable improvement late in the month which justifies a more positive outlook for the Christmas season.”
Business between Thanksgiving and Christmas can account for as much as half of a retailer’s yearly profit. Forecasters say the economy’s weakness will make shoppers hold back a bit this year. Holiday sales are expected to rise only about 5.5% after 1988’s surprisingly strong 9% gain.
Store owners anticipate the next few weeks will be difficult and many already are resorting to special discounts to pull shoppers inside.
The nation’s largest retailer, Sears, Roebuck and Co., said sales sagged 1.3% in the four weeks that ended Nov. 25 to $2.96 billion from nearly $3 billion in November, 1988.
Sales at Sears stores open at least a year, called same- or comparable-store sales, edged up just 0.4%. The industry attaches more significance to same-store sales, regarding them as a better reflection of a retailer’s performance than results that include newly opened stores.
A switch to a low-pricing policy and the discontinuation of huge sales this year has made Sears’ comparisons with last year’s results difficult. The giant retailer does about two-thirds of its business in durable goods so it has suffered with the slowdown in spending for furniture, home improvement items and similar merchandise.
K mart Corp., the second largest U.S. retailer, said sales rose 7.2% to $2.42 billion from $2.26 billion while its same-store sales grew 3.9%. K mart’s four-week sales period ended Nov. 22, so it didn’t include any portion of the Thanksgiving weekend while most other retailers had results through last Saturday.
No. 3 Wal-Mart Corp. reported a 27% November sales increase to $2.64 billion from $2.08 billion and its same-store sales rose 12%.