FINANCE

Moody’s: Retailers that opened early on Thanksgiving night gained advantage

BY Marianne Wilson

New York — Retailers that opened early on Thanksgiving evening gained an advantage and that promotional activity was about on par with last year, according to a new Moody’s report, “Thanksgiving Weekend: The Early Bird Gets the Worm.”

“Overall, the trends we observed this weekend are consistent with our expectations of 4% sales growth and 15% online sales growth for the 2012 holiday shopping season,” said Charlie O’Shea, VP — senior analyst at Moody’s and author of the report. “Retailers that opened early seemed to get a jump on those that delayed their openings until early Black Friday morning. We believe the early opening trend is accelerating. Consumers seem to like the option of segueing right from Thanksgiving dinner to shopping and buying.”

The one downside to the early openings was a lull in the stores on Friday afternoon and Saturday, the report said.

“While this is typical, it seemed to be exacerbated by the early openings as mall traffic seemed to slow as the weekend wore on,” O’Shea said. “Nevertheless, given the preliminary positive comments made by retailers that opened early, we feel that the Thanksgiving Day openings are likely here to stay, with ever-earlier openings and online activity," said O’Shea.

Promotional activity seemed to run about even with last year, Moody’s said, with consumer electronics led by flat-panel TVs continuing their prominent role in driving store traffic.

On the apparel front, department store operators such as Macy’s Inc. and Kohl’s Corp. opened early, and promotions ranged up to 65% off for private-label apparel and accessories. Overall inventories in this segment seem well-controlled, as Moody’s analysts observed fewer clearance racks compared with last year.

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FINANCE

FirstData: Year-over-year retail dollar volume growth on Thanksgiving and Black Friday a healthy 5.6%

BY Staff Writer

Atlanta — Year-over-year retail dollar volume growth on Thanksgiving and Black Friday was healthy at 5.6% as many retailers started the holiday shopping season earlier this year and consumers welcomed the opportunity to find bargains, according to a study by First Data Corp.’s First Data SpendTrend analysis for Black Friday 2012 compared with Black Friday 2011. (SpendTrend tracks same-store consumer spending by credit, signature debit, PIN debit, EBT, closed-loop prepaid cards and checks at U.S. merchant locations.)

Retail category performance varied considerably with building material, garden equipment and supply dealers, and clothing and clothing accessories stores being the top performers. Average ticket growth at retailers swung from negative (-0.9%) in 2011 to positive (+1.9%) in 2012 over the Thanksgiving to Black Friday period. Shoppers boosted their overall spend and retailers shifted discounting strategies. The rise in average tickets reflect the strengthening position of retail as some merchants may have less of an incentive to drive sales at the expense of profits.

“Holiday spending got off to a strong start as consumers were attracted by retailers’ efforts to make shopping easier, including opening stores on Thanksgiving and expanding shipping and layaway options,” said Rikard Bandebo, VP and economist, First Data. “Even though spending was not quite as strong on the East Coast, spending in hurricane-struck areas was still healthy and consumer confidence has been strong.”

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Comps take a tumble at Target

BY CSA STAFF

A worse than expected 1% decline in November same store sales indicates the holiday season is off to a slow start at Target.

The 1% decline was substantially worse than the low single digit increase the company forecast at the start of the month when it reported a 2.4% increase for October that was toward the low end of guidance. The November weakness suggest traffic trends may be deteriorating at Target as the company said blamed the decline on a decrease in comparable store transactions following that metric’s flat performance in October.

"November sales were below our expectations, reflecting weaker-than-planned sales performance in the first two weeks combined with stronger sales growth across all channels later in the month," said Gregg Steinhafel, Target chairman, president and CEO. "Profitability for the month remained on plan, reflecting our efforts to balance thoughtful price investments in an intensely competitive environment with our continued focus on driving sales."

Steinhafel sought to reassure investors disturbed by the November performance that the best is yet to come from the company and indicated same store sales for the five week December reporting period would increase in the low single digits.

"With the upcoming launch of the Target/Neiman Marcus Holiday Collection, our unique assortment of exclusive, affordable merchandise and the compelling benefits of 5% REDcard Rewards and our Holiday Price Match, we believe Target has the right plans in place to allow our guests to shop with confidence throughout the holiday season," Steinhafel said.

As in prior months, Target’s strongest growth came in the food category which produced a mid single digit increase and in health and beauty which experienced a low single digit increase. However, the home and apparel categories both decreased in the low single-digit range and hardlines dropped by mid single digits. The company’s performance was strongest in portions of the south and softest in portions of the northeast.

The worse than expected comp figures comes as Target is experiencing a modest uptick in delinquency rates within in credit card receivables portfolio. Target said the percentage of accounts 60 days past due in November was 2.7% and the 90 days past due total was 1.9%. Those figures hit lows for the year of 2.5% and 1.7%, respectively, this past summer. Even at the slightly higher amount, both metrics are half of what they were several years ago.

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