Retail Sales Hint at ‘Less Bad’ Holidays
Signs of hope for retailers showed up in September sales data released Thursday, which largely beat analysts' expectations and were the best in 14 months.
Then again, they didn't have to beat much after last year's sales slides.
The chilliest September nationwide in the three years helped boost moderate and off-price specialty apparel retailers, such as Kohl's and TJX, says Paul Walsh of Atmospheric and Environmental Research, a Lexington, Mass.-based firm that analyzes the impact of weather on businesses.
These stores' sales are more sensitive to the weather than high-end department stores, because customers frequent them when it's time to bundle up on a budget. Walsh says 75% of Kohl's September same-store sales, which were up an impressive 5.5%, and 74% of TJX's 7% increase can be explained by the weather.
Sales were better than analysts expected at chains including Macy's, which posted a 2.3% decline, and Victoria's Secret parent company Limited Brands, which was up 1%.
For some, Thursday's results helped raise expectations that the chill in consumer confidence is thawing and suggested even the most cautious consumers are starting to tiptoe back into malls.
The results could indicate that the holiday season may be "less bad" than last year, which is about all retail store owners can hope for this year, analyst Jennifer Black says.
Even the wealthiest consumers are expected to make dramatic changes in their holiday shopping behavior this season. American Express Publishing and Harrison Group's 2009 Survey of Affluence and Wealth in America, out Thursday, said the most affluent shoppers in its survey - those making $900,000 and above - planned to cut spending this holiday season by 21%. The decline among the wealthiest families, plus the loss of more than 1 million families from the upper middle class/affluent and super affluent/wealthy segments during the recession, means total holiday gift spending by them will be down 15%, the study concludes.
"Across the board, the wealthy will be giving fewer gifts, but gifts with greater meaning," says Jim Taylor, vice chairman of the Harrison Group. "Christmas this year will be from the heart, not from the wallet."