NEW YORK — The nation’s retailers posted a surprise sales decline for November after two consecutive months of gains, as a modestly positive start to holiday shopping wasn’t strong enough to offset weak spending the rest of the month.
The 0.3 percent decrease is especially worrisome because it comes on top of a freefall last November as spooked shoppers went into a defensive crouch after the financial meltdown. Analyst had expected a strong gain.
Analysts caution that a better gauge of the month may lie in government retail sales numbers, which will be released Dec. 11. Those figures offer a broader view of spending, including online sales and results from electronics chains — two bright spots for the holiday season, analysts said. Thursday’s figures also don’t include Wal-Mart Stores Inc., the world’s largest retailer, which no longer reports monthly sales.
Warm weather also was a factor in depressing shoppers’ appetite for seasonal apparel like coats and sweaters, analysts said.
Nevertheless, most retailers’ sluggish results missed already modest forecasts, a worrisome sign for an economy in the early stages of a fragile recovery. Now, merchants may have to step up discounting beyond what’s planned as they try to get financially strapped shoppers back to the stores in a season that is at best expected to be unchanged from a year ago.
“This is extremely disappointing for the retailers heading into the key selling season and it is not a good harbinger for things to come,” said Ken Perkins, president of retail research group Retail Metrics. “It also suggests that consumers are under significant amount of pressure. They’re ailing, struggling to make ends meet.”
According to sales results announced Thursday, most stores including department store chains Macy’s Inc., Children’s Place Retail Stores Inc., teen merchant Abercrombie & Fitch Co. and discounter Target Corp. posted sales declines. Saks Inc., which operates Saks Fifth Avenue, posted a sharp sales decline.
Target, which sells one of the widest ranges of goods among the stores reporting, said that strong sales during Thanksgiving weekend were not enough to offset weak business the rest of the month, sending sales in stores open at least a year down 1.5 percent. The drop was bigger than the 0.5 percent drop analysts were expecting and were in addition to the 10.4 percent decline in November 2008.
Warehouse club operator Costco Wholesale Corp. posted a 6 percent sales gain, though smaller than expected and half of which came from higher gas prices and currency shifts. Another exception was Limited Brands Inc., which runs Victoria’s Secret and Bath & Body Works. It reported a solid 3 percent gain instead of the decrease that Wall Street projected.
The figures are based on sales at stores open at least a year and are considered a key indicator of a retailers’ health because they exclude the effects of store expansions or closings.
The 0.3 percent drop, according to the International Council of Shopping Centers tally, is far worse than the original 5 to 8 percent growth forecast, which was whittled down to 3 to 4 percent earlier this week. The results come on top of a 7.7 percent drop a year ago.
Michael Niemira, chief economist at ICSC, said he wasn’t lowering his already conservative 1 percent holiday sales growth forecast. He still expects December sales at stores open at least a year to rise 2 to 3 percent and said consumers appear to be delaying their holiday buying.
After consumers showed some signs of life in September and October, merchants saw a sales lull throughout November until shoppers crowded stores and malls for the early morning specials for the day after Thanksgiving.
However, shoppers were picky about what they bought for themselves and others, focusing on discounted basics like microwaves, boots and bed sheets over the holiday weekend.
Economists say depressed spending could persist for several years amid stubbornly high unemployment — now at 10.2 percent, the highest in 26 years.
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