WASHINGTON — After the worst holiday season in 40 years, retailers face more sales declines in the months ahead as the recession deepens, job losses mount and consumers retrench further.
Retail sales plunged 2.7 percent in December, a record sixth straight monthly fall, and the first annual drop on government records dating to 1992, the Commerce Department said Wednesday.
Last month’s weakness — more than double what economists had expected — has extended into the new year with bankruptcy filings, store closings and more layoffs.
“Consumers are in deep hibernation, and there is no sign that they will wake up this spring or that the retail outlook will pick up anytime soon,” said C. Britt Beemer, chairman of America’s Research Group, a consumer research firm in Charleston, S.C.
This week alone, department-store chain Gottschalks put itself up for sale and said it had filed to reorganize in a Chapter 11 bankruptcy, discount clothing chain Goody’s Family Clothing filed for Chapter 11 protection, luxury retailer Tiffany & Co. lowered its year-end profit forecast, and Neiman Marcus said it was cutting about 375 jobs.
Last week, Macy’s said it will close 11 underperforming stores in nine states, affecting 960 employees. That will include two stores in Colorado.
“I think there will be a pickup in bankruptcies” this year, said Ken Perkins, president of research company RetailMetrics. “The whole department- store and specialty apparel sectors have been very weak now for some time.”
