Sept Retail Sales Expected To Help Ring In Tough Holidays
07 October 2009 - 7:33AM
Dow Jones News
U.S. retail sales numbers for September will likely foreshadow
the ghost of Christmas past, as consumers continue curtailing their
spending amid the highest unemployment rate in over a quarter
century.
September same-store sales data, to be released Thursday, are
expected to show a continued decline, demonstrating that retailers
still aren't able to build momentum despite easy comparisons from a
year ago.
"This will be the season of the blue jean instead of the
Blu-Ray," said Ellen Davis, vice president at the National Retail
Federation.
The best thing that might be said is that profit margins may not
take the big hits they did last year because retailers have been
ordering less merchandise. As a result, while still expected to be
highly promotional, retailers' discounting is seen as being more
planned this year than a lot of the across-the-board slashing that
occurred in 2008.
Still, consumers' frugality means it will take a lot of $10 and
$20 toys and basic apparel purchases to counter an expected slack
in sales of high-end electronics and other upper-end
merchandise.
The National Retail Federation on Tuesday projected U.S. holiday
sales over November and December will fall 1% this year to $437.6
billion. Last year, sales fell 3.4% over the same period, to
$441.97 billion, marking the worst holiday season for retailers in
the four decades that the data's been tracked. The 10-year average
rate is growth of 3.4%.
Roughly 70% of consumers plan to spend less or the same on gifts
this year than they did during the 2008 holidays, said consumer
data tracker BIGresearch in data released Tuesday.
In general, September "definitely foreshadows what's going to
happen during the holidays," said Pam Goodfellow, senior analyst at
BIGresearch.
September same-store sales are expected to show a 1.1% drop,
according to the 30 retailers tracked by Thomson Reuters. The
figure does not include Wal-Mart Stores Inc. (WMT), which stopped
reporting same-store-sales earlier this year.
September is something of a testing ground, marking the first
month that retailers are up against a same-store sales drop from a
year ago. But the decline is expected to be even bigger than
September 2008's 0.9% comparable-store sales decline.
Off-price retailers and discounters are expected to have had the
best September, prompting some analysts to see upside to estimates
for TJX Cos. (TJX), Ross Stores Inc. (ROST) and even Target Corp.
(TGT).
Department stores continue to be the recession's big strugglers,
with same-store sales declines expected for all but one of the
seven chain stores that Thomson Reuters tracks. Kohl's Corp. (KSS)
is projected to see a 0.1% gain, while Saks Inc. (SKS) is at the
other end of the spectrum, with an 11.1% drop projected.
Apparel retailers are seen as a mixed group, with positive
comparisons expected from Aeropostale Inc. (ARO) and Buckle Inc.
(BKE), and possibly even Gap Inc. (GPS). But Abercrombie &
Fitch Co. (ANF) remains a market-share loser, with same-store sales
expected to drop 20.8%, the biggest decline of any retailer Thomson
Reuters tracks.
-By Karen Talley, Dow Jones Newswires; 212-416-2196;
karen.talley@dowjones.com