The answer to that question depends upon who you ask.

Speak to ShopperTrak, they will tell you that even though traffic was off, sales increased 4.5%. The firm measures foot traffic in shopping centers and malls via 50,000+ video devices, and adds in U.S. Commerce Department sales
data.

Holiday sales in the U.S. climbed 4.5 percent, ahead
of ShopperTrak RCT Corp.’s forecast, as retailers lured customers with
discounts on clothing and electronics.

The gain exceeded the projection of a 3.6 percent increase,
ShopperTrak said in a statement today. Customer visits dropped 2.7
percent during November and December from a year earlier, the firm
said…

Other analysts and research firms have projected holiday sales may
be the worst in at least five years. The National Retail Federation has
forecast a 4 percent rise, the smallest since 2002."

Speak to two of the country’s biggest retailers, and you get very different numbers: Wal-Mart (WMT) said in early December that sales would rise between 1-3%; Target (TGT) said same-store sales for December may actually show a decline.

At the same time, the FT reported that "American Eagle, the youth clothing chain, and Men’s Wearhouse, which specializes in business suits, both cut their fourth-quarter earnings guidance on Wednesday – presaging what is expected to be a  round of grim December sales figures on Thursday from other leading US retailers."

My take? I suspect the ShopperTrak data has lots of inflation built into to it via the Commerce department.  If we go ex-food and energy to back out inflation, we can get Real sales increases (not nominal inflation gains). Then sales were somewhere between minus 1.5% and plus 1.5%.

>

UPDATE: January 10, 2008 9:32am

Yecch:

Retailers Post Weak December Sales

A number of retailers cut expectations, led by Kohl’s Corp., as companies largely posted December same-store-sales figures below already lackluster estimates.

One exception was Wal-Mart Stores
Inc., as the giant posted sales at the higher end of forecasts and
reiterated its fiscal fourth-quarter earnings forecast of 99 cents to
$1.03 a share.

The company posted a 2.4% gain in U.S. same-store
sales, excluding fuel, compared with its 1% to 3% forecast. Wal-Mart
stores reported 2.6% growth amid strength in grocery, pharmacy and
electronics departments. Sam’s Club — long the firm’s better
sales-growth performer — had a 1.3% increase amid "slightly lower"
traffic and weakness in home furnishings.

Target
Corp. posted a 5% drop, double the decline analysts were expecting. The
company warned on Christmas Eve that December same-store sales on a
calendar-adjusted basis might range from down 1% to up 1%; on that
basis sales fell 0.6%. The firm late Wednesday announced that Chief
Executive Robert J. Ulrich will retire May 1 and be succeeded by
President Gregg W. Steinhafel

 

>

Sources:
ShopperTrak Says Holiday Retail Sales Climbed 4.5%
Duane D. Stanford
Bloomberg, Jan. 9 2008
http://www.bloomberg.com/apps/news?pid=20601087&sid=aP7GHXxcdatg&

Clothing retailers cut their earnings forecasts
Jonathan Birchall
FT, January 10 2008 01:44
http://www.ft.com/cms/s/0/1d189592-bf19-11dc-8c61-0000779fd2ac.html

Category: Consumer Spending, Inflation, Retail

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

14 Responses to “How Good Were Holiday Sales Really?

  1. Eric Davis says:

    The usually suspects just spent 5 minutes talking about walmart, and 1 minute talking about how bad everyone else was.

  2. Eric Davis says:

    Old Topic:

    I like that we are getting more realistic about what the fed will and won’t do, and more realistic about it’s affect on the market.

    I like that we are getting more realistic/sceptical about the economic numbers.

    Does this say we have finally move significantly past Denial, Solidly into Anger, and should start seeing some signs of depression?

    It’s good to see us making progress.

  3. cinefoz says:

    1) How bad would things look if gift cards were taken into consideration?

    2) Has anyone noticed that the loudest voices predicting a recession are coming from screaming baby investment banks? The same ones that embodied stupidism recently.

    3) I saw a piece on national TV this morning about a manufacturing company (I don’t remember which) where a massive 130 jobs will disappear. It was described as a national crisis.

    While there is undeniably a slowdown, panic appears to be the order of the day for the media, who report this bilge without analysis or perspective.

  4. Vermont Trader.. says:

    I think the current sales level is priced in for a lot of retailers. If you are short, today may be a good day to cover. Look through some of the charts. these stocks have been hammered. i think we could see a big short squeeze in these names today.

    in this case… sell the rumor buy the news

  5. michael schumacher says:

    market got pushed up in anticipation of the retail news…..and BR still thinks no one is calling the shots at the lows……..too funny…go look at the I-day SPY(1 minute) chart and then tell me you still think it’s left to it’s own designs

    BTW Cinefoz that was A furniture co. in N. Carolina…hardly a cause to ring the alarm bells. ALl they needed to do was step over to Wall Street where the ax will be swung for a more relevant example.

    It’s pretty sad that we have just accepted that it’s ok to manipulate the markets just as long as you are able to react quickly enough to enrich yourself. I, too , folllow this practice however it really shows what the biggest problem our market has….itself.

    Ciao
    MS

  6. cinefoz says:

    MS Said:

    It’s pretty sad that we have just accepted that it’s ok to manipulate the markets just as long as you are able to react quickly enough to enrich yourself.

    reply: On the way down, the dead weight of panic will eventually lower the market to wherever it should be. Common sense eventually surfaces and the big money is humbled. For proof, look at the screaming finance babies. Stupid, well presented and eloquent, is still stupid.

    On the way back up, I rely on the cheerleaders and phonies who claim there is no limit to up. I am depending on them to motivate others to buy like their lives depended on it. I love free markets.

  7. Stuart says:

    Dollars to donuts Walmart’s increase is entirely attributable to the increase in food sales. More and more, it’s becoming a grocery story and we all know the impact of food inflation.

  8. halbhh says:

    The Overall Picture, or Big Picture, at the moment is about as good as it can be considering all the economic history of the last few years.

    Consider: Oil inflation is *not* about US demand now, it’s about Asian demand. The slow to come benefit is gradually arriving: better milage autos selling well, and being developed.

    Food inflation is in part about ethanol diversion of cropland, and so is in a good part about Oil inflation. In short, if the Fed had been tighter, overall inflation would still be just about where it is. No difference.

    In the meanwhile consumers are neither collapsing into a large decrease in spending nor are they overextended into a final last gasp of credit orgy. Moderate.

    Consumers are actually acting as perfectly as you could hope for the best economic outcome later.

    The declining dollar increased exports.

    Altogether, the economy has held up better than we expected, and by any reasonable evaluation, it’s still a soft landing at the moment.

    Of course, one thing is a huge number of naive homeowners imagine their house will retain most of it’s recent market value of a year ago, and not head down the way it will. So there is a lack of understanding there.

  9. Johnny Vee says:

    WalMart is the poor mans Costco.

  10. donna says:

    Since Walmart is now selling gas at some stores, this really isn’t so surprising. Gas and food prices were up in December.

  11. R. Timm says:

    Walmart is to some degree an “inferior” retail establishment. Remember good old Macro Econ 101 when “inferior goods” do better when economic conditions decline. People that need a new car go and buy a Kia because they can’t afford the Honda. Well I think a lot of folks stoped shopping at Macys and Abercrombie to get their goods from Walmart this Christmas.

  12. Same-store sales in December for Buckle, a specialty retailer, were up 19%. Not everyone is suffering from the retail malaise.

  13. Weak December Sales for Retailers

    The nation’s big retail chains, a closely watched barometer of economic health, reported dreary December sales on Thursday, which may stoke fears of a recessionary downtown.

    Sales fell at chains as varied as Nordstrom, Macy’s, Abercrombie & Fitch and American Eagle Outfitters when compared with those in the period a year earlier.

    Stores cited a pullback in spending by consumers and a quirk in the calendar that pushed more holiday shopping days into November than December.

    The size of the sales declines surprised analysts. Sales fell 11.4 percent at Kohl’s, 7.5 percent at J. C. Penney and 6 percent at Gap.

    Even seemingly invincible stores, like the discounter Target, struggled. Sales fell 5 percent without adjusting for a shift in the calendar.

    But sales rose 2.7 percent Wal-Mart, whose relentless price-cutting appeared to resonate with anxious shoppers.

    “Consumers clearly tightened purse strings this holiday season,” said Ken Perkins, the president of Retail Metrics, a research firm.

    Dozens of retailers are reporting sales at stores open at least a year, a crucial yardstick in retailing because it excludes business at new and closed stores, which tend to distort performance.

    Even if consumers had not cut back, retailers had expected a lackluster month because of the calendar shift. So stores encouraged investors to look at the average sales for November and December combined. On that basis, overall retail sales rose 1.7 percent, the weakest performance since 2002, according to Retail Metrics.

    Macy’s, for example, said sales fell 7.9 percent in December and 1.1 percent for November and December combined.

    “After a strong November, we had hoped that a more positive sales trend would continue through December,” said the chief executive of Macy’s, Terry J. Lundgren. “But macroeconomic trends led customers to spend cautiously for the holiday.”

    Target said that, with the calendar shift factored in, its sales rose 0.6 percent, an unusually low number for the chain. Target’s chief executive, Robert Ulrich, said earnings for the last three months of the year would probably fall compared with results in the period a year earlier.

    Wal-Mart, the nation’s largest retailer, stood apart from its rivals. It appeared to snatch business from competitors by staging deep, early morning discounts every weekend throughout November, a tactic generally reserved for the day after Thanksgiving.

    Even so, Wal-Mart said consumers flocked to its food, pharmacy and electronics departments, which are not as profitable as its clothing and housewares.

    Clothing chains at the mall had trouble attracting consumers. Sales fell 6.2 percent at Hot Topic, 6 percent at Gap, 2 percent at American Eagle Outfitters and 2 percent at Abercrombie & Fitch.

    Department stores did not fare much better. Nordstrom said sales fell 4 percent. J. C. Penney, which reported a bleak December, predicted sales would fall in January, too.

    MasterCard Advisors, a division of the credit card company, said sales of women’s clothing and jewelry, two pillars of department-store shopping, fell in December.

  14. Jerry says:

    Thanks for the update. I heard the same thing today about sluggish retail sales with the exception of Walmart. And, then also heard that the fed reserve may be lowering interest rates. Yay! Insurance against a recession! I have a lot of colleagues in the mortgage banking business and I’m sure this news makes them very happy. I hope it leads us out of this slump…

    Jerry
    http://www.leads4insurance.com