December '07 Sales Weak for Department, Specialty Stores
December sales were weak for many retailers, according to the New York–based International Council of Shopping Centers Inc. December’s retail business increased only 0.9 percent compared with the same time in 2006, according to ICSC’s chief economist, Michael Niemira.
“Overall, the consumer was conservative in their spending for the 2007 holiday season,” Niemira said. He also said that the season’s retail sales were the weakest since 2002.
Department stores experienced a tough December. Same-store sales for Seattle-based Nordstrom slipped 4 percent. Macy’s same-store sales stumbled 7.9 percent for the month of December. Sales were better for the luxury sector, with high-end store Neiman Marcus reporting a 2.9 percent increase in same-store sales for December.
Specialty stores also faced a lot of hurdles during December. Fort Myers, Fla.–based Chico’s reported a same-store decline of 13.7 percent. San Francisco–based Gap and Hot Topic of City of Industry, Calif., showed declines of 6 percent and 6.2 percent, respectively.
There were success stories during December. Kearney, Neb.–based specialty store The Buckle reported an increase in its same-store sales of 18.7 percent during the last month. Discounters such as Ross Stores, based in Pleasanton, Calif., reported a 3percent increase. Wal-Mart reported a 2.7 percent increase for its same-store sales.
Decreases in sales were blamed on some macroeconomic trends such as skyrocketing fuel prices and the fall-out from the 2007 credit crunch. Many retailers hoped to encourage buying with heavy sales and markdowns during December. However, the impact of the promotions was dulled by a decrease in shopping traffic, according to the ShopperTrak RCT Corp.
The Chicago-based retail-research firm reported total U.S. foot traffic for the week ending Dec. 22 fell a significant 10.6 percent compared with the same period last year.
The tepid business climate could continue into January, according to Niemira. “We expect a gain of 1.5 percent to 2 percent as the tough economic environment lingers,” he said. —Andrew Asch
