NEW YORK — At this point, there may not be much retailers can do to salvage the holiday season. And it hasn’t even officially started.
They’ve pulled out a slew of tricks already, from deep discounts to early shopping hours, to little avail. October showed the slowest monthly sales growth in 12 years, retailers reported Thursday.
Higher gas prices, rising heating fuel costs, tightening credit, lower home values and dangerous toys have sapped the confidence of American consumers, and it all may add up to the slowest holiday shopping season in five years.
“We’ve been trying to tighten up, have some discipline and get it under control,” said Janet Grau, who was shopping for items at a Linens ‘n Things in Milwaukee this week.
It was weak across many sectors in October, from mall- based apparel stores like Limited Brands Inc. to department stores like J.C. Penney Co. Even the world’s largest retailer, Wal-Mart Stores Inc., posted sales below expectations despite heavy discounting.
The few standouts were warehouse club operators such as Costco Wholesale Corp. and BJ’s Wholesale Club Inc. as consumers sought out lower prices than even discounters offered.
The International Council of Shopping Centers-UBS tally at stores open at least a year, considered a key indicator of a retailer’s health, rose 1.6 percent in October. That was below the original 2.5 percent forecast and marked the slowest October pace since 1995.
It also was under the 2.2 percent average growth rate for retailers’ fiscal year, which begins in February.
Mild weather accounted for some of the slower growth. People tend to hold off buying winter clothing until they must. Michael Niemira, chief economist at ICSC, estimated that warmer than average fall temperatures depressed sales results by about three-quarters of a percentage point.
But a balmy fall is only a small part of retailers’ woes, which are mounting with Christmas only seven weeks away.
Shoppers have been wrestling with higher gas and food bills and depreciating home values. For a long time, Americans had been using the rising values of their houses as a kind of piggy bank, borrowing from their equity on a bet that home prices would continue to climb.
