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Retailers Hit a Home Run in December

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After a weak November, retailers bounced back in a big way in December. ICSC, Retail Forward, Retail Metrics and RetailSails have all done the math in comparing results from various chains and the verdict is that many retailers had a very merry Christmas and largely beat expectations. Retail Forward, Retail Metrics and RetailSails concluded that same-store sales jumped 3.0 percent in the month while ICSC's figures showed a 2.8 percent improvement. That made December the best month for retailers since July 2008 or April 2008, depending on whose numbers you look at.

ICSC's tally shows that same-store sales rose 2.8 percent in December, the third time in four months that ICSC's index has risen. The result is a nice rebound from the 0.3 percent drop in December. Overall, ICSC says the two-month figure for the holiday shopping season showed a 1.8 percent gain in same-store sales. The numbers beat ICSC's initial projections, which predicted about a 1 percent increase for the November/December period.

ICSC's numbers are based on 33 retailers. In the commentary in its monthly report, ICSC said:

The holiday season's sales began slowly, but spending finished strongly as consumers were completing their holiday‐gift shopping later than last year (and later than in recent years for which ICSC has surveyed consumer spending patterns).

...

Of particular note in December were strong sales for toys (noted by Toys R Us‐‐domestic comps rose by 4.6%, Target and Kmart, for example), electronics (noted by Target) and footwear (noted by Target, Bakers Footwear‐‐which posted a 9.9% comp‐store sales gain‐‐and JC Penney, for example). By segment, luxury‐department store sales soared by 7.1%‐‐helped by a promotional shift at Saks‐‐but that was the strongest segment performance since November 2007 (+11.4%).

Here are ICSC's results going back to 1993.

(Click for larger image.)

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According to Retail Forward, sales-weighted same-store sales excluding Walmart increased 3.0 percent in December for the 32 retailers that reported numbers. (A pdf with each retailer's results can be downloaded here.) Frank Badillo, senior economist at Retail Forward, said in a statement, The trend through the holidays is now pretty clear that shoppers are moving toward stronger spending into 2010. But it's also clear that some cautiousness will persist and that spending will remain uneven across categories and retailers.

Retail Metrics, meanwhile, reported that same-store sales increased 3.0 percent--the single biggest same-store sales gain that the firm has measured since April 2008. Combined for November and December, Retail Metrics' calculates same-store sales rose 2.2 percent. The December results are 120 basis points better than it had been projecting. Retail Metrics' numbers include 30 retailers. Of those, 14 posted gains, one had flat sales and 15 posted same-store sales declines.

According to the firm's monthly report:

A last minute sales surge saved the day prior to and immediately following Christmas. Just as important were the slew of positive pre-announcements on 4Q earnings that came from retailers that were able to keep promotions in check and maintain all-important margins. Retailers are currently expected to post a 28.5% 4Q09 earnings gain, which will most certainly be revised upward. An impressive 72% beat expectations while just 28% missed, much better than long term averages.

RetailSails reached the same conclusion as RetailMetrics and says same-store sales rose 3.0 percent in December. The blog's figures include numbers from 32 different retailers.

Retailers turned in a stronger-than-expected sales performance in December, as better inventory management and less promotional activity helped drive the best same-store sales results since April 2008. For the 32 companies RetailSails tracks, preliminary results show total sales rose 5.4% in December to $52.11 Billion, while same-store sales increased 3.0% compared to a 3.8% plunge in the year-ago period.

Here's one chart from the post, but there are more here.

(Click for larger image.)

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Elaine Misonzhnik

Senior associate editor Elaine Misonzhnik has been writing for National Real Estate Investor since June 2006 and has covered commercial real estate for more than 12 years. She first became...
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