Black Friday fails to boost stores
Thanksgiving weekend sales couldn't save a disappointing November for retailers; teen sellers hit hard.
NEW YORK (CNNMoney.com) -- Retailers placed a lot of hope on the Thanksgiving weekend gift buying this year, but merchants failed to get the big sales boost they were seeking.
According to monthly same-store tracker Thomson Reuters, overall sales rose just 0.5% last month versus its forecast for a 2.1% increase. The figure does not include leading retailer Wal-Mart Stores (WMT, Fortune 500), which reports sales on a quarterly basis.
The firm tracks same-store sales, or sales at stores open at least a year, for such large national chains as J.C. Penney (JCP, Fortune 500), Macy's, Target (TGT, Fortune 500) and Gap (GPS, Fortune 500).
Still, the marginal increase is an improvement over last year's steep 7.8% decline in November.
"The fundamentals for many Americans are still weak," said Scott Hoyt, senior director of consumer economics with Moody's Economy.com.
"Unemployment is more than 10%, wages are not growing, the effects of the stimulus measure designed to boost spending have worn out and no more are coming," he said.
Among these factors, the biggest overhang on consumer spending is the job market, Hoyt said. "Consumer spending will turn when the job market improves," he said.
Some specialty sellers were hit especially hard. Among them same-store sales at teen clothing chain Hot Topic fell 11.7%. last month. Analysts had expected a decline of 8.1%, according to sales tracker Thomson Reuters.
Children's Place, a seller of clothing and accessories for young kids, suffered a 13% drop in its same-store sales versus expectations for a 1% increase.
Sales at another youth merchandise chain Abercrombie & Fitch (ANF) slumped 17%
Elsewhere, total sales at No. 1 warehouse club operator Costco (COST, Fortune 500) rose 6% compared to a forecast for an increase of 8.1%. Target, the No. 2 discounter after Wal-Mart, said its sales declined 1.5%.
"Sales were slightly below our expectations as softer results in the first three weeks of the month were substantially offset by better-than-expected sales during our post-Thanksgiving Two-Day sale," Gregg Steinhafel, CEO of Target Corporation, said in a statement.
"For the month overall, comparable store transactions were positive and inventories remain well-controlled, giving us confidence in our ability to perform well during the holiday season in what continues to be a challenging economic environment," he said.
Sales at department store chain J.C. Penney declined 5.9%, which the company said was in line with its expectations of a decline between 4% to 7% while sales at Macy's fell 6.1%.
But there were a few bright spots. Limited Brands, parent of Victoria's Secret and Bath & Body Works chains, increased its same-store sales by 3% in November and high-end seller Nordstrom logged a 2.2% gain in its sales last month.
November is a critical month for retailers since it marks the start of the year-end holiday shopping season, typically on Black Friday, the day after Thanksgiving.
November and December together can account for 50% or more of merchants' annual sales and profits for the full year.
Although many Americans have had a year to absorb shocks to the economy and to their own household budgets, industry watchers say continued job losses and stagnant income growth are forcing most consumers to keep shopping with extreme caution.
Given that context, the National Retail Federation (NRF) expects holiday sales to decline 1% this year, a improvement from last year's 3.4% drop in sales for the season.