Discounters post strong results in September
New York City — Costco Wholesale Corp. turned in a strong September performance, leading the category with a 12% rise in same-store sales for the month. Wall Street expected a 10.1% rise. However, the warehouse club operator cautioned that margins were negatively impacted during the period and that it would be raising its membership fees to compensate.
Target Corp., helped by strong sales of groceries, beauty products and clothing, saw September same-store sales rise 5.3%, beating the projected 3.9% increase. Sales for the period rose 6.5% to $5.9 billion.
“We’re very pleased with our September comparable-store sales, which were somewhat ahead of our expectations,” said Gregg Steinhafel, chairman, president and CEO, Target Corp. “We experienced strong sales results throughout the month and across a broad array of merchandise categories, demonstrating Target’s ability to … generate strong financial performance even in this soft economic environment.”
Target was likely helped by its limited-time Missoni line launch, which sold out almost immediately and temporarily crashed the retailer’s website.
Other discount and warehouse same-store sales results included:
- TJX Cos. same-store sales in September rose 4%, beating the projected 3.2% increase;
- Ross Dress for Less was up 5%;
- SteinMart dipped 1.7%; and
- Stage Stores edged down .7%.
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NRF: Holiday sales forecast to rise 2.8% to $465.6 billion
Washington, D.C. — A report released Thursday by the National Retail Federation predicted an average holiday shopping season. According to the NRF forecast, holiday retail sales for 2011 are expected to increase 2.8% to $465.6 billion. While that growth is far lower than the 5.2% increase retailers experienced last year, it is slightly higher than the 10-year average holiday sales increase of 2.6%, according to NRF.
“Retailers are optimistic that a combination of strong promotions and lean inventory levels will help them address consumer caution this holiday season,” said Matthew Shay, president and CEO, NRF. “While businesses remain concerned over the viability of the economic recovery, there is no doubt that the retail industry is in a better position this year to handle consumer uncertainty than it was in 2008 and 2009.”
Though several economic indicators paint a solid picture for the holiday season – including 14 consecutive months of retail sales growth and a substantial reduction in household debt – continued consumer uncertainty over the stock market, higher gas and food prices, fiscal policy and sputtering job growth will impact spending this holiday season, said NRF.
Additionally, the substantial year-over-year gains for the 2010 holiday season will create more difficult comparisons for retailers to achieve this year.
“Just when you think the U.S. economy is turning around, another factor comes into play that changes the game,” said NRF chief economist Jack Kleinhenz, Ph.D. “Persistently high unemployment, an erratic stock market, modest income growth and rising consumer prices are all combining to impact spending this holiday season. How Americans will react to shaky economic data is the question, but the good news for retailers is that shoppers have not yet thrown in the towel.”
In related holiday news, NRF has projected that retailers will hire between 480,000 and 500,000 seasonal workers this season. The association used its holiday forecasting model to create the hiring projection. The resultant numbers are comparable to the 495,000 seasonal employees retailers hired last year.
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