Inside This Issue - News
Final month of í12 brings mixed sales results
January 28th, 2013
NEW YORK – Sales across the mass market in December were mixed, with a handful of retailers showing significant gains over 2011 but others seeing their sales fall off from the prior year’s level.
According to the National Retail Federation (NRF), the mixed performance during the month led to an overall boost of 3% in holiday season sales.
"For over six months we’ve been saying that the fiscal cliff and economic uncertainty could impact holiday sales," NRF president and chief executive officer Matthew Shay says. "As the number shows, these issues had a visible impact on consumer spending this holiday season."
One of the companies that reported the strongest December was Costco Wholesale Corp., where net sales for the month hit $11.2 billion, a 12% increase over the same period in 2011. Same-store sales increased 9%, with the company’s stores in the United States showing an 8% gain over the prior year and its international units turning in a 10% same-store sales increase.
Similarly, Alco Stores Inc. was one of only a handful of retailers to report a sales gain during the month. Executives report that the Abiline, Kan.-based discounter saw sales from continuing operations (excluding fuel) increase 4.4% in December. Same-store sales inched ahead 1.1%.
Meanwhile, sales at Target Corp. were also up for the month — albeit minimally. Overall sales at the company inched ahead 0.8%, ending the month at $10.1 billion. Executives say that same-store sales were essentially flat.
"December sales were slightly below our expectations, as strong results late in the month did not completely offset softness in the first three weeks," chairman, president and chief executive officer Gregg Steinhafel says.
Industry watchers say that the lackluster holiday season was driven in part by fewer shoppers visiting the nation’s retail outlets.
According to retail tracking firm ShopperTrak, the number of shoppers visiting stores during in the week ended December 22 was 3.3% lower than a year earlier. But, the company says, that was a vast improvement over a week earlier.
Sales in the final week before Christmas were 39.1%, higher than the previous week and foot traffic was 32% higher.
Market watchers and forecasters say the lack of shoppers in the nation’s retail outlets had a direct impact on mass market sales.
Among the trade classes that were hit the hardest by the downturn were drug stores.
Walgreen Co., for instance, saw its December sales fall 4%. The company says overall front-end sales decreased 1.3%, while comparable-store front-end sales decreased 2.3%.
On the pharmacy side of the business, Walgreens said total sales fell 4.9% and comparable-store pharmacy sales fell 8.9%.
At Rite Aid Corp. comparable-store sales were down 2.2% with same-store sales in the front end dipping 1% and same-store sales falling 2.9%.
Total sales for December decreased 2.7% to $2.05 billion from $2.11 billion a year ago.
Other retailers reported equally dismal results.
At Fred’s Inc., for instance, total sales for the month dipped 1% to $209.9 million from $213 million in December 2011. Comparable-store sales decreased 4.2% compared with a decline of 0.4% in the same period last year.
"December sales did not meet our expectations, as customers limited their purchases of discretionary and weather-related merchandise again this month," CEO Bruce Efird said when the results were released earlier this month.
Still, he stressed, the company remains optimistic about the future.
"We expect that 2013 will be a springboard year for Fred’s," Efird said. "We begin 2013 with many new programs and initiatives designed to improve customer traffic."