DALLAS — If there are any doubts that shoppers are motivated
by price, Black Friday results settled that one.
But weak sales the rest of the month left major U.S. chain
stores with largely disappointing November sales and much ground to make up in
the critical December holiday shopping season.
The tally of mostly department stores and specialty apparel
chains reversed two months of momentum and fueled fears that consumers have
permanently changed their shopping behavior.
“Consumers have been hiding under their beds since
they’ve been taken to the woodshed and given a sound beating. That makes for a
different relationship with their wallets,” said Paco Underhill, author
and founder of Envirosell, a behavioral market research and consulting company.
Lackluster results for retailers ultimately could end up
meaning good news for shoppers. Experts say expect more discounts this week and
every day leading up to Christmas.
“We’re seeing the shift in consumer behavior. The
consumer waited until Black Friday, when the retailers signaled them with very
good promotions,” said Laura Gurski, partner in the retail practice at
A.T. Kearney. “Now the promotions will continue in order to keep sales
alive through Christmas.”
Major U.S. chain stores reported a 0.3 percent decline in
November, “marking a disappointing reversal in the pace of sales after two
consecutive monthly gains,” according to the International Council of
Shopping Centers. Analysts were expecting November sales to rise more than 2
percent.
Absent from the results are Wal-Mart, Best Buy and Toys
“R” Us — chains that only report quarterly sales but had some of the
biggest lines over the Thanksgiving weekend, when disciplined shoppers with
lists in hand, cherry-picked deals on HDTVs, toys and electronics, and went
home.
Consumers are asking questions “and thinking harder
about the answers,” said Leonard L. Berry, marketing professor at Texas
A&M University and author of several books on customer service.
“Consumers are asking themselves: Do I really need this product? Do I
really need to buy this many presents? Do I really need a new coat?”
“I’m not as confident as some that this is temporary
behavior,” Berry said.
Consumers are also making the shift more to online shopping,
Gurski said. Retailers are training shoppers to wait for specials online with
promotions on Cyber Monday, or the Monday after Thanksgiving.
More retailers pushed online specials this year, resulting
in sales increasing 5 percent from last year’s Cyber Monday. Online sales
reached $887 million, matching the heaviest online spending day on record, Dec.
9, 2008, according to comScore, a firm that measures digital commerce.
J.C. Penney Co. extended its online promotion an extra day
after the volume of Cyber Monday shoppers slowed checkouts and some people
couldn’t complete their orders by midnight, said a spokeswoman for the
Plano-based department store retailer. Dallas-based Neiman Marcus Inc. said its
online and catalog sales rose 18.1 percent in November.
There’s a lot of catching up to do in December as surveys
show shoppers are behind in their gift buying, said Michael P. Niemira, chief
economist and director of research for the shopping center group.
ICSC is expecting December sales to increase 2 to 3 percent
from a year ago. Despite the November weakness, the shopping center group
reaffirmed its forecast for sales to rise 1 percent from last year in the
combined November-December season. Some retailers do as much as 40 percent of
their annual sales in those two months.
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John Long, a retail strategist at consulting firm Kurt
Salmon Associates, said retailers who learned last year’s lessons have
“honed prices” and planned promotions with such precision that he
doesn’t believe last year’s 70 percent and 80 percent off signs will appear
before Christmas.
“Those retailers have lowered their top line (revenue)
expectations in order to have better profits than last year,” Long said.
Price cuts are impressive and part of a whole customer
service package, he said.
This week, J.C. Penney and Macy’s removed fine-print
restrictions on 15 percent off and $10 off coupons for the first time. “No
exclusions” on apparel at Macy’s and on Levi’s and KitchenAid Artisan
stand mixers at Penney “removes some frustrations associated with using
those coupons” for the consumer, Long said.
Kohl’s Corp. surprised analysts with a 3.3 percent increase
in November sales. J.C. Penney same-store sales fell 5.9 percent and Dillard’s
Inc. posted an 11 percent decline. Target Corp. said same-store sales fell 1.5
percent and Costco Wholesale Club posted a 6 percent increase.
Neiman Marcus posted a 7.5 percent decline in same-store
sales and said it will be cutting 75 jobs in March and April after deciding to
outsource information systems jobs. The company has been cutting costs all year
as even luxury shoppers pulled back during the recession.
Saks Inc.’s sales fell 26.1 percent after it didn’t repeat
aggressive promotions and clearance activities from last year. Nordstrom had
another positive month with a 2.2 percent increase.
Thomson Reuters said 22 out of 30 retailers reporting
monthly results Thursday missed analyst expectations. With the exception of
American Eagle Outfitters, all teen retailers missed their forecasts, said Ken
Perkins, analyst at Retail Metrics
“The bottom line is that comp store sales were very
disappointing,” he said. “Facing the easiest monthly comparison this
decade, retailers managed to eke out a very soft 0.7 increase” by Perkins’
measure.
“The standard line” he heard from retailers was
that even a stronger year over year Black Friday weekend was not enough to
offset weak sales throughout most of the month, he said.
Via McClatchy-Tribune News Service.
