Stores Post Ho-Hum Sales for November

The retail industry’s bid to encourage an early holiday season buying surge failed, as most major chains on Thursday reported mediocre sales for November.

Department stores and other chains with moderately priced merchandise--Sears, Roebuck & Co. among them--reported declines or modest growth largely because of lackluster demand for clothing. Though specialty apparel chains, such as Ann Taylor Inc., were hurt most by that weak demand.

However, discounters fared well--particularly Kmart Corp.--as consumers showed a strong preference for both upscale stores and low-price chains in the month that encompasses the start of the holiday season.

The retail industry tried to get consumers in the holiday spending mood early, with promotions and sales events in October and early November, thus hoping to avoid deep discounting as Christmas approaches. Analysts on Thursday said retailers may be forced to slash prices soon if the pace of spending does not pick up. They continued to predict sales increases of 3% to 5% over last year’s holiday season.

Kmart, based in Troy, Mich., may have been the biggest beneficiary of the preference for discount shopping. The company reported a 5.4% increase in same-store sales over the same period a year ago. Retailers and analysts focus on same-store sales--revenue from stores that have been operating at least 12 months--to make accurate year-to-year comparisons.

The November tally is just the latest development in the comeback of Kmart, which had a loss of $431 million in 1995.

Kmart spokesman Robert Burton said the company had strong sales in early November in part because it mailed a toy catalog with discount coupons to many consumers in October. Also contributing to Kmart’s results were its Martha Stewart line of home furnishings and its “Sesame Street” clothes for children, Burton said.

Target, a major Kmart competitor, registered a 4.7% increase in same-store sales from November 1996. Mervyn’s, Target’s sister company--both chains are owned by Minneapolis-based Dayton Hudson Corp.--had an 8% same-store increase for the month over the same period last year. And Wal-Mart Stores Inc., the largest of the discount giants, registered a 6.1% increase over the year-earlier period.

“This shows that the American shopper is on a big bargain hunt,” said Kurt Barnard, a New Jersey-based retail economist and publisher of Barnard’s Retail Trend Report.

Although the U.S. economy remains strong, said Barnard, consumers are concerned about their personal debt levels and recent layoffs at high-profile companies such as Levi Strauss & Co., Singer Co. and Kimberly-Clarke Corp.

However, Barnard and most other analysts are maintaining predictions of moderate growth. Walter Loeb of New York-based Loeb Associates is predicting a seasonal sales increase of 3.5% to 4% over last year, but Loeb said much of that increase may come in late December.

“Consumers may be postponing their purchases to get late-season bargains,” said Loeb, who predicts more clearance events if sales do not pick up by Dec. 17. “Thanksgiving weekend was strong, but overall sales for November were relatively weak.”

Sears was among the retailers making a great effort to generate sales in early November. However, the company’s sales actually declined 0.6% for the month, hurt by weak demand for apparel.

Sears spokesman Bill Parke said the retail giant also got off to a slow start last year--when it registered a 0.7% decline in same-store sales for November. Sears, however, had a 9.5% same-store increase in December 1996--one of the best in the nation.

Other chains reporting same-store results were Cincinnati-based Federated Department Stores--operator of Macy’s--with a 2% increase over the year-earlier period; St. Louis-based May Department Stores--operator of the Robinsons-May chain--had a 3.7% increase; and J.C. Penney had a 3.1% decrease. Ann Taylor reported a 3.2% decline over November 1996; Talbots, a 2.5% drop, and Limited Inc., a 2% increase.

At Saks, same-store sales rose 4.6% over the year-earlier period. Neiman Marcus recorded a 3.7% increase at stores open at least one year.