NEW YORK — Record Black Friday sales failed to lift retail growth in November to last year’s level. While chains overall reported gains for the month, results at some, including Target Corp., fell below expectations, foretelling mixed results for the holiday season.
Record Black Friday sales failed to lift retail growth in November to last year’s level. While chains overall reported gains for the month, results at some, including Target Corp., fell below expectations, foretelling mixed results for the holiday season.
Kantar Retail reported same-store sales growth slowed to 3.3% in November as results were challenged by relatively strong prior-year comparison periods and softness outside of Black Friday. The sales-weighted composite for the 22 retailers reporting — most of them apparel chains — was weaker than the 3.9% same-store sales gain in October and the 5.6% gain in November 2010. The calculations do not include Walmart, which does not report monthly results.
"Retail sales growth into the holidays is reflecting the spending intentions of shoppers," said Kantar senior economist Frank Badillo. "They have pulled back on their spending plans from earlier in the year, but they are loosening the purse strings a bit as the holiday approaches. As a result, sales growth should not slow much more but will likely remain focused on holiday deals, as some household budget concerns persist."
Target’s same-store sales increased just 1.8%, "near the low end of our expectations for the month, as we compared against very strong performance last year," said, chairman, president and chief executive officer Gregg Steinhafel. "As we kicked off the holiday season following Thanksgiving, sales were strongest on Black Friday, as guests responded to our midnight opening and compelling prices."
For December, he said, the discounter expects "a competitive and promotional environment as consumers continue to focus on value." The company is forecasting same-store sales growth for this month in the low- to mid-single digits.
Target may have been hurt by not opening for Black Friday until midnight, industry observers said. Walmart, by contrast, was open on Thanksgiving.
Aside from Target, mass retailers posted stronger-than-average numbers, led by the performance of Costco Wholesale Corp.
The warehouse club operator reported U.S. same-store sales growth of 6%, excluding gas. Analysts had projected a 4.7% gain.
Among drug chains, Walgreen Co.’s 1.8% same-store sales advance was edged out by Rite Aid Corp.’s 1.9%.
At Fred’s Inc., same-store sales rose just 1.5% compared to 4.7% in November 2010. "Lapping very strong sales in the year-earlier period and facing an extremely aggressive competitive environment, we are pleased with our overall sales performance for November," said CEO Bruce Efird. "Comparable-store sales growth, driven largely by increased customer traffic, continues to reflect the success of our sales and marketing initiatives. Our best-performing Core 5 departments during the month included pet, household supplies and pharmacy. As Christmas nears our stores are well stocked, and our customers will find great values and strong merchandise selections to finalize their holiday shopping."
The mixed results for the month could not detract from the unprecedented volume generated on Black Friday and the long Thanksgiving weekend. According to a National Retail Federation survey conducted by BIGresearch, traffic and spending reached historic highs both online and in stores.
According to the survey, a record 226 million shoppers visited stores and websites over Black Friday weekend (not including Cyber Monday), up from 212 million last year. Digging deep into their holiday budgets, the average shopper spent $398.62 over the weekend, up from $365.34 last year. Total spending reached an estimated $52.4 billion.
Shoppers also checked out retailers’ deals online, spending an average of $150.53 on the Web — 37.8% of their total weekend spending.
"Stuffed to the brim from their holiday meals and eager to shop, more consumers than ever turned out for retailers’ Black Friday promotions, a promising sign for the economic recovery," said NRF president and CEO Matthew Shay. "After an historic holiday weekend, retailers know the holiday season is far from over and will continue to look for ways to excite holiday shoppers and build on the momentum we’ve seen thus far."
The survey found 28.7 million people shopped online and at stores on Thanksgiving Day — up from 22.2 million last year. More people than ever also shopped online and in stores on Black Friday, as 86.3 million shoppers braved the crowds on that day alone.
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