Retailers report healthy sales gain
By Leslie Earnest
Los Angeles Times
After an uncertain start, shoppers are finishing out the holiday season on a strong note, all but ensuring that most retailers will log respectable sales gains this year.
Sales at established stores in the week ending Dec. 27 were up a solid 5.5 percent from last year, according to a closely watched tally of 79 retailers released yesterday.
The week "made the season" for retailers, said Michael P. Niemira, chief economist and
research director for the International Council of Shopping Centers, which compiled the so-called same-store sales results in conjunction with Wall Street investment firm UBS Securities. Same-store results, from stores open at least a year, are an important barometer of a retailer's health.
The season got off to a somewhat good start in November across the country, partly because retailers made a strategic decision to lower prices early to lure customers. Major storms on the East Coast kept people at home in the first two weeks of December. In the third week, sales bounced back and continued to gather steam through Christmas.
Niemira has been predicting for weeks that same-store sales would rise 4 percent for the November-December period. He didn't change his mind yesterday.
In any event, dazzling numbers won't be needed to outshine 2002: Last year, same-store sales rose just 0.5 percent for November-December combined, the weakest gain in three decades.
This year, "it looks like this season came down to the wire. Most retailers were very pleased with the end results," said Ellen Tolley, a spokeswoman for The National Retail Federation, a leading industry trade group.
She said 50 retail executives surveyed by the federation described themselves as considerably cheerier this month about sales, store traffic and low inventory levels.
And retailing pollster ShopperTrak said there was a 24.6 percent spike in general merchandise sales last week as procrastinators, bargain hunters and consumers with gift cards converged on stores. Wall Street seemed to cheer the latest retailing news. Yesterday, the Morgan Stanley index of 38 leading retailers rose 0.40 percent, putting it up 2.4 percent since Dec. 24.
Economists closely monitor such results because consumer spending constitutes about two-thirds of the U.S. economy.
"I think it indicates we're continuing to see a nice, steady recovery — nothing overheated, but nothing incredibly weak either," said Alec Levenson, a labor economist at the University of Southern California Marshal School of Business.
The results weren't dramatic enough to cause Niemira and other industry gurus to retally their predictions for the season. The retail federation has held fast to its forecast of an overall sales increase of 5.7 percent.
"This was never going to be a spectacular holiday season," Tolley said. "It was supposed to be a return to normal, and that's what we found."
But not all industry watchers were crowing yesterday.
"We feel that many of these optimistic numbers may turn out to have been a little too optimistic," said Kurt Barnard, president of Barnard's Retail Trend
Report, who was troubled by the fact that many retailers needed to slash prices to get sales as the season ticked away. "Consumers began to buy once they realized they could get a bargain."
