- The Washington Times - Thursday, January 10, 2008

Shoppers spent even less than predicted over the holidays, according to retailers, who reported December sales results today. The poor results, which failed to meet already low expectations, signal that the economy was weighing on shoppers’ minds this season.

Apparel and department stores were hit particularly hard. Same-store sales tumbled at Kohl’s Corp., Macy’s Inc., JCPenney Corp. Inc., Target Corp., Limited Brands Inc. and Ann Taylor Stores Corp.

Even Nordstrom Inc., whose upscale shoppers typically are immune to changes in the economy, reported that same-store sales fell 4 percent compared to the comparable period the year before.

High fuel costs, the housing slump and a weak job market proved to be a toxic combination shoppers couldn’t ignore this season.

“The retail numbers leave little doubt that shoppers are in belt-tightening mode,” said Frank Badillo, senior economist of TNS Retail Forward, a Columbus, Ohio, research group. “No part of retail spending is immune right now … there are signs of weakness that will persist into 2008.”

Target suffered a 5 percent sales drop and warned that fourth-quarter earnings would be lower than they were the year before.

Many retailers, including Kohl’s, Ann Taylor and Limited, lowered their earnings estimates for the fourth quarter.

The bright spot was discounters, such as Wal-Mart Stores Inc. and Costco Wholesale Corp., which exceeded analysts’ estimates. The teen clothing retailer Aeropostale Inc., which discounted its merchandise by 50 percent during much of the season, reported a 12 percent increase in sales.

Retailers typically make about 20 percent of their annual sales during the holidays.

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