RetailSails

Retailers continue to see slight improvements in sales as they prepare for the holiday season, with both ICSC and Redbook expecting smaller year-over-year same-store sales declines for September:

• The International Council of Shopping Centers (ICSC) reported that comparable same-store sales increased 0.9% in the 4th week of September vs. a year ago, while same-store sales were up a slight 0.1% on a week-over week-basis. “A pickup in customer traffic at discounters and department stores, in particular, relative to last year, helped lift the pace of sales,” said Michael P. Niemira, the ICSC’s chief economist. He added that the expected cool temperatures over the next 3 weeks should refocus the consumer on fall merchandise. For September, ICSC Research expects sales less Wal-Mart will be down by about 2% from its year-ago level, on par with the August decline.

• Redbook Research reported that retail same-store sales for the week ending September 26th declined 2.2% compared to the year-ago period, while month-to-date sales rose 0.4% from the same period last month, and are down 2.3% compared to the same period last year. “Several retailers suggested that the drop in temperatures this week may have provided the impetus they sought,” said Catlin Levis, Redbook analyst. “With back-to-school programs now largely complete, most stores are reporting that business was better than expected, with clean sell-through.” Note that Wal-Mart stopped reporting weekly and monthly sales figures in May of this year, and the substantial impact they had on the index is evident in the graph below.

While most analysts have come out with forecasts for flat to slightly down holiday sales, ICSC came out with a fairly bullish projection today for an increase of between 1% and 2%. “One might imagine that it would take a miracle on 34th Street — and Main Street — for retailers to have a successful 2009 holiday season,” the ICSC stated in its report. “However, that outcome – even without a miracle – is not far fetched.” That would certainly represent an improvement from last year’s dismal 5.8% drop in November-December.

On a more sobering note, the National Retail Federation said today they expect total Halloween sales to decline 17.7% from last year to $4.75 Billion, with average spending per consumer down 15.4% to $56.31. “The economy has caught up to Halloween this year,” said Tracy Mullin, President and CEO, National Retail Federation. “Since retailers know that Americans will be looking to celebrate on a budget, there’s no doubt we will see creative costume and decorating ideas in every price point imaginable.”

Retailers have slashed inventories with the hope they won’t have to resort to deep discounting as they did last holiday season. However, the consumer has been spoiled by non-stop promotions over the past year, and odds are they are not ready to pay anywhere near full price. Expect the chains that have outperformed throughout the recession to continue to lead, with off-price and discount stores gaining the largest share of holiday traffic.