Retail sales weak in advance of holiday season

Retail sales weak in advance of holiday season
After so-so September sales figures, retailers are heading into the holiday shopping season, which can account for up to 40% of annual sales for some companies. (Los Angeles Times)

Retailers had a shaky September, as lukewarm back-to-school shopping and a plunge in car purchases caused sales to slide from August, according to the government.

Retail sales last month amounted to $425.9 billion, down 0.1% from August, the U.S. Census Bureau said Tuesday. But when stripped of the effects of motor vehicle and parts sales, which tanked 2.2%, the gauge was up 0.4%.


The clothing and accessories sector dipped 0.5% from August to September, while department stores suffered a 0.9% decline.

Despite the debut of the new iPhone 5S and 5C from Apple, the electronics segment reported a mild 0.7% uptick.

September retail sales are up 3.2% compared to the same month a year earlier, according to the government.

The unimpressive September results can be blamed in part on fears related to the government shutdown, which lasted for more than two weeks in October.

Consumer confidence  fell to the lowest level in six months, the Conference Board said Tuesday.

The situation is a nail-biter for retailers heading into the key holiday shopping period, which can account for up to 40% of annual sales for some companies.

This year, the season is limited to four weekends between Thanksgiving and Christmas, down from five last year.

Shoppers will make 1.4% fewer store visits in the next two months compared with 2012, but will spend 2.4% more, according to data firm ShopperTrak.

Black Friday on Nov. 29 will remain the busiest shopping day of the holiday scrum, and the so-called Super Saturday before Christmas will be the second-strongest for sales.

"The four weekends between Thanksgiving and Christmas are pivotal for retailers," said ShopperTrak founder Bill Martin in a statement. "Though shoppers may wait until the weekends to hit the stores, they will come prepared with information about exactly what they want to buy."

To prepare, Wal-Mart said Tuesday that it will promote about 25,000 employees to higher-paid positions with more responsibility during the fourth quarter. Over the entire year, the retailer said it will have done the same for more than 160,000 associates.

Workers will be allowed to choose extra hours that suit their  schedules, according to the company. And existing employees will have first crack at open positions within the chain.

A separate retail sales measure from the International Council of Shopping Centers and Goldman Sachs, based on a dozen major retail chains, showed September sales rising 3.5% year over year.

Apparel sales, however, sank 1.8%.


The Tuesday report forecasts a 3% to 4% increase in sales for October, noting that 44% of consumers who are planning to pick up holiday gifts have already started shopping.

For the week ended Oct. 26, sales are up 2.2% compared to the same period a year earlier, helped in part by the looming Halloween holiday.

But a sudden cold front also helped – the average national temperature fell 7.7 degrees Fahrenheit, making it the third-coldest October week in more than 22 years, according to Weather Trends International.