November sees weak sales gains
Published: Wednesday, December 5, 2012 at 1:34 p.m.
Last Modified: Wednesday, December 5, 2012 at 1:34 p.m.
Black Friday was no match for Superstorm Sandy.
Major retailers from Target to Macy's reported weak November sales as the strong start to the holiday shopping season — including a good showing on the day after Thanksgiving — wasn't enough to fully offset the damage caused by Sandy earlier in the month.
The storm stunted enthusiasm among shoppers during the first couple of weeks of November just as stores were preparing for the busiest shopping period of the year, a roughly two-month stretch at the end of the year when retailers can make up to 40 percent of their annual revenue.
"It really took away the punchbowl for retailers and put them behind the eight ball heading into the crucial weekend," said Ken Perkins, president of RetailMetrics, a research firm.
Eighteen retailers last Thursday reported that November sales at stores open at least a year — an indicator of a retailer's health — through last Saturday were up 1.7 percent compared with the year-ago period, according to the International Council of Shopping Centers. That's well below the group's anticipated forecast for a 4.5 percent to 5.5 percent gain.
Only a small group of stores representing about 13 percent of the $2.4 trillion U.S. retail industry report monthly revenue, and the list excludes big merchants such as Wal-Mart Stores Inc., the world's biggest retailer.
November sales show that stores were challenged by the impact of Sandy, which hit the Northeast on Oct. 29 and disrupted business activity and households for several days. MasterCard Advisors' SpendingPulse, which tracks spending, said that Sandy knocked off nearly $4 billion in retail sales during the first week in November in the hard-hit Mid-Atlantic and Northeast regions, which accounts for 24 percent of retail sales nationwide.
The disappointing November sales come after robust sales over the Thanksgiving weekend, the official kickoff to the holiday shopping season. A record 247 million shoppers visited stores and websites over the four-day period that started on Thanksgiving this year, up 9.2 percent of last year, according to a survey of 4,000 shoppers that was conducted by research firm BIGinsight for The National Retail Federation trade group. Spending over the four-day weekend totaled $59.1 billion, up 12.8 percent from 2011.
November sales affirm that this holiday season could be a difficult one for stores even though Americans' confidence is at the highest level since February 2008. Overall, the retail federation estimates that sales in November and December will rise 4.1 percent this year to $586.1 billion. But that's more than a percentage point lower than the growth in each of the past two years, and the smallest increase since 2009.
The modest forecast comes as U.S. shoppers face economic uncertainty. After all, many Americans are still concerned about the weak job market. And they worry whether Congress will be able to head off tax increases and spending cuts before the U.S. reaches the "fiscal cliff" in January. If Congress doesn't reach a deal, it would mean less money in Americans' paychecks.
AP Writer Juan Carlos Llorca contributed to this report from El Paso, Tex.