Retail sales growth in the week after Thanksgiving fell to 3.1 percent, the slowest rate in four years, as consumers delayed holiday purchases to wait for discounts.
A longer shopping period between Thanksgiving and Christmas contributed to consumers’ delays, the International Council of Shopping Centers and UBS Securities LLC said in a statement today. Their survey showed that 25 percent of shoppers finished most of their purchases by Dec. 3, down from 32 percent the prior two years.
Sales growth at U.S. retail stores open at least a year declined from a 3.5 percent gain in 2005 and was the lowest since a 2 percent gain in 2002. With an extra shopping weekend this year, consumers are “procrastinating,” said Dan Popowics, an analyst with Cincinnati-based Fifth Third Asset Management.
“Shoppers are savvy and realize that in some cases they can be rewarded for waiting,” said Popowics, who helps manage $21 billion in assets. “The calendar needs to turn over a few more days before the season heats up a bit.” U.S. retailers’ November sales rose less than analysts estimated and the ICSC last week lowered its forecast for the holidays after Wal-Mart Stores Inc., the world’s biggest retailer, forecast slowing growth. Last year, 32 percent of the retail industry’s profit and 27 percent of sales were derived in the November-through-January period, the group said.
Boom or Bust “I’d be surprised if you saw a boom from here on out or a bust,” ICSC Chief Economist Mike Niemira said in an interview. “I suspect that you will see a lot of the buying particularly in the last two weekends before Christmas.” Niemira said Nov. 30 he expected same-store sales to increase by as little as 2.5 percent for November and December compared with last year. The ICSC had previously estimated a 3 percent gain. In 2005, sales for the two months increased 3.6 percent.
The Johnson Redbook retail sales index was up 2.4 percent in the week ending Dec. 2 over a year ago on inclement weather in the Midwest and consumers delaying holiday shopping “until the last minute,” expecting discounts, Redbook said in a separate statement today.
‘Late Wave’ Sales for the week through Dec. 2 fell 2.6 percent from the week earlier, the third decline in the past four weeks.
The New York-based trade group tracks reports from as many as 75 companies.
Chain-store sales for the month of November rose 2.1 percent, the smallest gain since March, ICSC said on Nov. 30 after Wal-Mart posted its worst monthly sales numbers in more than a decade.
Luxury and department chain stores led the way with gains of 5.1 percent and 4.6 percent, respectively.
Shares of Wal-Mart fell 10 cents to $46.19 at 12:06 p.m. in New York Stock Exchange composite trading. The Standard & Poor’s 500 Retailing Index, which is up 12 percent this year, rose 3.79 to 507.64, while the broader S&P 500 index rose 4.62 to 1,413.70.
