Strong Black Friday week sales were no match for the disruption caused by Hurricane Sandy, as major retailers hope to make up lost sales in December.
According to the International Council of Shopping Centers (ICSC), sales rose 1.7% during November.
Macy’s recorded a 0.7% decline in same-store sales decline over the month. CEO Terry Lundgren summed up the situation for many retailers: “Despite the largest-volume Thanksgiving weekend in our company’s history, we were not able to overcome the weak start to the month, which included the disruption of Hurricane Sandy. Yet we remain on track to deliver a very strong sales performance in the fourth quarter, consistent with our guidance.”
Kohl’s posted the biggest negative surprise: a 5.6% same store sales decline. Kohl’s president Kevin Mansell emphasized that while sales were “below expectations,” it was encouraged by improved sales over the Thanksgiving week.
“There was a significant shift in Black Friday-related sales into our e-commerce channel. For the week, both transactions and sales in e-commerce increased over 50% with most of these sales being recognized in December. The combination of these e-commerce sales and our store sales resulted in higher sales for the last week of the month,” Mansell said.
Indeed, for ICSC vice president of research and chief economist Michael Niemira, there were other factors at play, including the impact of online and lay-away purchases made in November that will be recognized in December.
“Three factors were responsible for the below plan performance,” said Niemira. “First, the impact of Superstorm Sandy on the first two weeks of the fiscal month; second, online sales made during the final week of the month actually will be booked during December’s fiscal month once the items are shipped; and third, the strength of lay-away purchases during November which also will be booked in December once the full-payments are made.”
Yet the news wasn’t all bad. Stage Stores saw comparable store sales rise 13.2% during November, despite the disruptions of Hurricane Sandy. President and CEO Michael Glazer said the increase got it off to a “fantastic start to the holiday season.”
“Despite the disruptions caused by Superstorm Sandy early in the month, we achieved a comparable store sales increase each week of November, culminating in a gain of over 20% in the week of Thanksgiving. We participated like never before during the Thanksgiving weekend as we offered some of our most exciting and compelling holiday offers and deals ever. Our strategy worked well as we achieved higher sales while maintaining our merchandise margin rate. We are extremely encouraged by our outstanding November results and fully expect that our positive momentum will continue in December,” he said.
Other retailers posting strong results included Ross Stores with a 2% comparable sales rise, Stein Mart with a 7.1% comparable store increase and TJX with a 3% rise.
The results will put a heavier burden on December to make up for lost sales, according to Retail Metrics’ Ken Perkins, but retailers are in a good position to capitalize.
Perkins said: “We are now in the midst of a traditional lull period which stretches from this past Monday all the way through Saturday, December 15. The period is prolonged this year as there are two additional shopping days prior to Christmas this year. Retailers will need to generate some buzz and make it worthwhile for consumers to hit the mall and web sites during this period. This has been difficult the past few years as sales have generally tailed off without steep discounts. Retailers are generally in good inventory positions this year.
“They also have a nice margin tailwind in that cotton prices have come down from last year so input costs are not has high. All of this could lead to a game of chicken to see who blinks first with deep price cuts. Retailers can wait it out longer this year because they are not carrying as much inventory.”