Inside This Issue - News
Sales gains unevenly distributed
January 27th, 2014
NEW YORK – U.S. retail sales grew at a healthy pace in December, although not all retailers shared the gains.
The National Retail Federation (NRF) estimates that December retail sales, which exclude automobiles, gas stations and restaurants, increased 0.4% seasonally adjusted month to month, and 4.6% unadjusted year over year.
Total holiday retail sales, which include November and December sales, increased 3.8% to $601.8 billion, according to the NRF. Non-store holiday sales, an indicator of online and e-commerce sales, grew 9.3% to $95.7 billion.
"Despite facing a truncated holiday season, severe weather and shaky consumer confidence, retailers rose to the challenge and executed their strategies with proven success," NRF president and chief executive officer Matthew Shay said. "The holiday sales numbers are a testament to a resilient industry that knows what the customers want, when they want it and how they want to get it. Considering that retail sales are an important barometer when measuring the overall health of our national economy, this report provides a level of true optimism that the recovery is picking up steam, and once again, retail leads the way."
The U.S. Commerce Department’s estimate of December retail sales, which includes such categories as automobiles, gasoline stations, and restaurants, increased 0.2% seasonally adjusted month to month, and 4.1% adjusted year over year.
Sales at Sears Holdings Corp., though, fell sharply during the holiday season. Same-store sales fell 9.2% at the company’s Sears chain during the nine weeks ended January 6, and fell 5.7% at Kmart.
Fred’s Inc. reported that its sales for the five-week fiscal month of December were essentially flat at $209.5 million, while same-store sales increased 1.4%. Sales were in the range of management’s expectations, said CEO Bruce Efird, and were driven mainly by the strong performance of the chain’s pharmacies. But Fred’s fourth quarter promotional strategy, which was centered on Black Friday, "did not produce the incremental gains we expected," Efird said.
Costco Wholesale Corp. was among the retailers posting sales gains in December. Same-store sales at Costco beat analysts’ expectations, advancing 3% in the five weeks ended January 5. (If the effects of falling fuel prices and foreign exchange are excluded, same-store sales were up 5%.) The company’s net sales rose 6% in the period, to $11.53 billion.
Walgreen Co. had a very strong month, with same-store sales up 6.1%. Same-store sales increased 9% in the pharmacy, and 2.5% in the front of the store. Total sales increased 7.2% to $7.2 billion. Pharmacy sales were up 10.2% and front-end sales grew by 4%.
Rite Aid Corp. reported a 2.9% jump in same-store sales for December, led by a 4.1% gain in pharmacy same-store sales.