NEW YORK (CNN/Money) -
Sales at U.S. retailers barely rose in the third week of December, two industry reports said Tuesday, as the nation's merchants struggled to salvage what is shaping up as the worst holiday shopping season in 30 years.
Malls opened as early as 7 a.m. Tuesday to try to catch a last rush of shoppers. Bankrupt discount retailer Kmart Corp. (KM: Research, Estimates) said it was staying open for 110 hours straight through Tuesday evening.
Weather wasn't helping in some areas, with heavy snow forecast for parts of the Ohio River Valley a potential hurdle for last-minute shoppers in the Midwest.
Chain store sales barely rose in the first three weeks of December as holiday promotions failed to rouse reluctant American consumers. (Photo: CNNfn)
The numbers for last week -- the last full week before Christmas on Wednesday -- were less than encouraging.
Sales at stores open at least a year, a key gauge known as same-store sales, rose a paltry 0.1 percent for the week ended Dec. 21 from the previous week, the Bank of Tokyo-Mitsubishi and UBS Warburg said Tuesday.
Same-store sales rose just 1.7 percent from the same week a year ago. That's well below the 4.5 percent year-over-year increase posted in the comparable week last year, the Bank of Tokyo-Mitsubishi and UBS Warburg reported.
"The bottom line is, the [holiday sales] performance is likely to be the weakest on record," said Michael Niemira, retail analyst with Bank of Tokyo-Mitsubishi.
Saturday, Dec. 21, was the busiest shopping day of the holiday season, yet most retailers said sales were below expectations for the week, and that some of the biggest selling items weren't even holiday-related. Everyday goods such as pharmacy items and pet supplies had the strongest sales, according to the banks' report.
The banks also forecast that December same-store sales will rise 2.5 percent from a year earlier, which means total holiday season sales will likely rise a disappointing 1.5 percent from last year, which would be the weakest in more than 30 years.
Separately, Instinet Research said in its weekly Redbook report that sales at major U.S. chain stores grew 0.2 percent in the three weeks ended Dec. 21 from a year earlier.
Retailers have been struggling to lure shoppers into stores during the critical holiday season, hoping that big discounts would overcome buyers' fears about losing jobs, a slack economy and the potential for war with Iraq.
Merchants got off to a good start with better-than-expected sales during the Thanksgiving weekend, but then sales tapered off. Several of the nation's malls reported brisk sales during the last weekend before Christmas, though traffic is off a bit from last year.
Traffic in and around the Garden State Plaza mall in Paramus, N.J., got so heavy Monday night that officials were forced to redirect cars and alter the traffic patterns around the complex until things smoothed out, said Lisa Wolstromer, a spokeswoman for the mall, which is owned by Westfield Shoppingtown.
Meanwhile, some analysts cut earnings forecasts for retailers ranging from Wal-Mart Stores Inc. (WMT: up $0.18 to $49.77, Research, Estimates) to upscale jeweler Tiffany & Co. (TIF: down $0.54 to $24.11, Research, Estimates). The holiday season is critical for retailers because it typically provides about half their sales and profits for the entire year.
Emme Kozloff, a retail analyst with Sanford Bernstein, cut her fourth-quarter earnings estimate for discounter Target Corp. (TGT: down $0.41 to $28.13, Research, Estimates), which said late Monday that sales fell well below its expectations for the third straight week, hurt by dismal demand for clothing and sporting goods.
Goldman Sachs analyst George Strachan cut his earnings forecasts for Wal-Mart and Federated Department Stores Inc. (FD: up $0.10 to $27.94, Research, Estimates), which owns Macy's and Bloomingdale's, a day after they posted weak sales.
Toy retailer FAO Inc. (FAOO: up $0.08 to $0.68, Research, Estimates) is among the biggest casualties of the holiday season, saying on Monday it would close nearly a quarter of its 253 stores.