Stores bag best sales in almost 2 years

By Parija Kavilanz, senior writer


NEW YORK (CNNMoney.com) -- After a very long and painful wait for retailers, shoppers finally came through in the last month of the year to lift crucial holiday store sales.

But monthly sales numbers Thursday from leading store chains also showed that U.S. consumers clearly shopped on their own terms, waiting much later in the season to bag the deepest discounts in stores.

Which device would you be interested in trying?
  • Apple's tablet computer
  • Google's Nexus One smartphone
  • Both
  • Neither

Thomson Reuters, which tracks monthly same-store sales for 30 chains such as Costco, Target (TGT, Fortune 500), Gap and J.C. Penney (JCP, Fortune 500), said overall December sales for the group rose 2.9%, a far better performance than the 3.6% decline a year earlier.

The firm had initially forecast an overall sales increase of 2% for the month.

December's performance was a significant improvement from a slight 0.5% same-store sales gain in November. It was also the best monthly sales performance for the group since a 3.4% gain registered in April 2008, the firm said.

The November-December sales period is critical for the retailing industry because that two-month period can account for 50%, or more, of retailers' sales and profits for the full year.

The National Retail Federation (NRF) has forecast 2009 holiday sales to decrease 1% this year, compared to a 3.4% decline the prior year. Final sales figures for the season will be announced next week.

Given the much-improved December sales performance, industry watchers are hopeful that the final holiday sales might even show a gain.

"The numbers were very good and it's encouraging that the strength was seen across multiple retail categories," said Chris Donnelly, retail analyst with consulting firm Accenture.

"Consumers are opening up their pocketbooks more than before," he said. "They are buying more electronics and luxury items in December. Both categories are harbingers of discretionary spending."

Where Americans shopped

With the economy and job concerns still on their minds, consumers still favored discounters such as Costco (COST, Fortune 500) last month. The No. 1 warehouse club operator posted a 9% gain in its same-store sales, versus analysts' expectations for a gain of 7.9%.

Same-store sales are a key measure of a retailer's performance and measure sales at stores open at least a year.

Costco's competitor BJ's Wholesale Club reported a 4.8% same-store sales increased in December.

December sales at Target (TGT, Fortune 500) increased 1.8% compared to a 4.1% decline a year ago.

Department store operator Sears Holding (SHLD, Fortune 500), which also owns discounter Kmart, logged a 0.4% sales gain in the month, primarily boosted by a strong 5.3% same-store gales gain in sales at Kmart. The company also raised its fourth-quarter profit estimates as a result.

"Retailers were already planning for a modest holiday sales season but consumers spent on the higher-end of expectations," said Donnelly. "This means that retailers' profits will be good."

Clothing and accessories chain Gap Inc. (GPS, Fortune 500) saw one of the biggest holiday sales rebounds last month. The company logged a 2% sales increase last month compared with a 14% drop in December sales in 2008.

And sales at Children's Place, a seller of infant and kids' apparel, rose 4% versus a 4.8% decline a year ago.

Soft spots remain

A sales rebound wasn't in store for everyone, however. Among the losers last month was teen merchandise seller Hot Topic, which suffered a 10.9% sales decline.

Limited Brands, parent of Victoria's Secret and Bath & Body Works chains, logged a disappointing 2% sales decrease. Analysts had expected a decline of 1.5%.

Department store chain J.C. Penney's sales fell 3.8% in the month.

Despite December's improvement, Donnelly said he's hesitant to say that consumer spending has turned the corner. "Consumers still face a significant headwind in the nation's high unemployment rate," he said.

"And although sales were up in December, they were up against a very bad year an 2008," he said. "So retailers also benefited from easier comparisons." To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,828.24 0.49 0.00%
Nasdaq 4,791.63 4.31 0.09%
S&P 500 2,067.56 -5.27 -0.25%
Treasuries 2.19 -0.04 -1.79%
Data as of 5:16pm ET
Company Price Change % Change
Kinder Morgan Inc 41.35 -0.97 -2.29%
Halliburton Co 42.20 -5.14 -10.86%
General Electric Co 26.49 -0.38 -1.41%
Bank of America Corp... 17.04 -0.07 -0.41%
Apple Inc 118.93 -0.07 -0.06%
Data as of 1:02pm ET

Sections

Union-backed demonstrators are protesting outside some Walmart stores Friday, asking the company to pay workers at least $15 an hour. More

From their smartphones, tablets or laptops -- and the comfort of the living room or Thanksgiving dinner table -- Black Friday shoppers could find deals all week that rivaled the in-store doorbusters. More

Natalie's Cakes and More has raised $84,000 through GoFundMe after protests trash store. More

Retailers are promising big deals this Black Friday, but are the savings actually worth the shopping mayhem? Test your deal-sniffing skills. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.