The News is (Nearly) All Good

Discussion
Dec 03, 2010
George Anderson

By George Anderson

It’s hard to look anywhere online this morning without finding
a story about how good a month November was for retailers. Same-store sales
at retailers tracked by Thomson Reuters were up six percent.
The International Council of Shopping Centers (ICSC) had the number at 5.8
percent. The consensus going into the month was that sales would be up three
percent and change.

Online
sales, which were expected to be up for the month, didn’t disappoint, with
IBM’s CoreMetrics, comScore and others reporting double-digit increases over
last year. Cyber Monday generated over $1 billion in revenues.

"It’s a cheerful holiday start — for most," Alison Kenny Paul,
vice chairman and leader of the U.S. retail team at Deloitte, told The Wall
Street Journal
. "People are back in spirit, shaking off the recession
and spending on themselves, as well as for gifts."

Another positive for
retailers is that consumers still have a lot of shopping to do. The Journal,
sourcing ICSC, reported fewer than one-in-three consumers had completed their
holiday season shopping by the beginning of this week. That is below the 42
percent for the same period last year.

Pretty much everywhere you look, retailers
reported better-than-expected results. In fact, it’s probably easier to list
the few that fell below expectations. The poster child for the under-performers
appears to be Aeropostale. The teen retailer appears to be behind the curve
on current fashions and had to resort to aggressive discounting (50 – 75 percent
off) to get consumers into its stores. The company announced a c-suite shakeup
this week with co-CEO Cindy Meads leaving the company and Thomas Johnson taking
over the role solo.

Discussion Questions: Are you surprised by the results of the holiday selling
season so far? Do you expect December’s results to be similarly positive?
What retailer(s) have surprised you most so far for either good or bad?

Please practice The RetailWire Golden Rule when submitting your comments.

Join the Discussion!

21 Comments on "The News is (Nearly) All Good"


Sort by:   newest | oldest | most voted
Ryan Mathews
Guest
10 years 5 months ago

No question that the heavy discounting caused lots of folks to shop early and possibly heavier than they had planned. That said, December sales should be respectable if not awe inspiring.

Dick Seesel
Guest
10 years 5 months ago

The November results posted yesterday were surprisingly good and (for once) more in line with NRF numbers than ShopperTrak’s more guarded reporting. Without reporting from Walmart, we are not seeing the entire picture but it’s clear that department stores and “upscale” discounters (Target as opposed to the dollar stores) are regaining share. There is evidence that consumers feel “permission” to do more discretionary spending than they have felt for awhile, especially in apparel and the home store. Last weekend was not just about electronics, toys and doorbusters.

Nevertheless, today’s jobless report is a sobering reminder that we are not out of the woods yet. Let’s hope that the uptick in consumer sentiment and spending is not smothered by a wet blanket of tough economic data three weeks before Christmas!

David Livingston
Guest
10 years 5 months ago

There is no denying our economy has been booming now for almost two years. It’s just making up for a short term glitch we had around 2008 where things seemed to dip way below normal levels. Now it’s just correcting itself.

As time goes forward I don’t expect the news to be overly good. While it will be good in reality, I think expectations may be too high considering what we have recently been experiencing. A lot of people will be feeling rich this month because several companies are declaring special dividends, many paying out all of 2011’s dividends this month in order to beat the expiring tax cuts. I expect to see more of this happening this week. Combine that with “help wanted” signs suddenly cluttering the landscape, it would appear things are going a bit too good.

Doug Fleener
Guest
10 years 5 months ago

What I found most interesting is the number of retailers who reported that shoes were an especially strong performer in November. Kohl’s said the footwear sector was the best performing category, and Neiman Marcus and Saks also reported strong shoe sales.

We can call it the shoe spending index. Shoes along with jewelry were some of the first products to slow down in the recession. With the big bump in shoe sales (along with jewelry) it’s a clear sign the consumer is opening the wallet more.

Gene Hoffman
Guest
Gene Hoffman
10 years 5 months ago

Not too surprised that November was good for sales. The people with discretionary income just got tired sitting on the sidelines, allaying their fears about the economy and their possible guilt feelings about the suffering of unemployed fellow men, particularly when retailers threw heavily discounted items at them at the end of the month. The jobless joined in as best they could also and tried to take advantage of very unique low-priced offerings. These factors all came together at the same time in November.

Paula Rosenblum
Guest
10 years 5 months ago

I wasn’t surprised to see traffic up. God knows there were plenty of incentives to buy.

The time that really matters is RIGHT NOW. The next 2 weeks. If sales dip too far, retailers will get way over-aggressive in their discounting. Too dramatic of a U-shaped sales curve will spell bad news. The devil is in the details, and the details are post-Cyber-Monday through December 12.

Cathy Hotka
Guest
10 years 5 months ago

There is a huge amount of pent-up demand out there; consumers know that their closets are looking a little tired, and the all-important September issue of Vogue featured a lot of leg looks. Retailers who sell basics are going to be pleasantly surprised this holiday season.

Bill Hanifin
Guest
10 years 5 months ago

That traffic is up does not surprise, but like most numbers, they often tell only part of the story.

Retailers should be mindful of how consumers are paying. Reports are that debit card use will increase and that means there will be a ceiling on total spend. Maybe sales were strong as budget conscious consumers too advantage of early discounting.

If the predictions of debit card use and adherence to budgets becomes true, sales will be moderated throughout the balance of the holiday.

Chuck Palmer
Guest
10 years 5 months ago

It looks like a combination of pent up demand–the desire to shop without a gray cloud over our heads–and retailers/brands aligning their inventory and deals with consumer attitudes. I’ve seen a few reports of consumer concern about selection and choice.

I believe the two sides of the relationship feed off of each other; good news is good news.

Camille P. Schuster, PhD.
Guest
10 years 5 months ago

The sales started strong and early. The consumers responded. The sales are continuing and consumers are still spending. It does look as though sales for the season are likely to be up this year. Profits may be another issue. A critical factor for the future is whether spending will continue into next year or whether this is just holiday shopping.

Charles P. Walsh
Guest
Charles P. Walsh
10 years 5 months ago

I predict that these results are not predictive of the Holiday season success. We are not in a recovery, unemployment rose again this month.

I think we’ll look back at a strong November wherein consumers took advantage of early heavily discounted purchasing opportunities. It isn’t indicative of more disposable income, just that more of what little consumers had was spent in November.

I’m afraid that December retail sales will be flat to down.

Bernice Hurst
Guest
10 years 5 months ago

For the first time this year I took advantage of Black Monday cybersales to Christmas shop for my American family. Partly because of the discounts, partly because I wanted to allow enough time for delivery. And partly because I suspected that if I didn’t buy what I wanted when I wanted, they would soon be out of stock. As it was, the toddler-sized dress I bought was my third choice and I was unable to get the scarf and mitten combination I liked from the same store. Buying in different stores would have incurred extra delivery charges (and yes, folks, lots of stores do charge them and they are very hard to avoid if spending small amounts in different places and then shipping to Alaska). So all is not as rosy as it may seem when shopping online and there are lots of different reasons why November sales may have been high.

W. Frank Dell II
Guest
10 years 5 months ago

I am neither surprised nor believe the good times are arrived. A 2% increase over 2009 does not bring us back to 2008 levels. The consumer is and has changed. Our Black Friday and Cyber Monday may not be the best season projectors. The product mix may be more telling than the sales dollars. Are consumer replacing worn outn needed items or are they reducing their want list? Are they buying basics or luxury this time? Are the inventory levels right this year or will there be big sales to move the inventory or will items run out of stock resulting in lost sales?

Many questions remain and there are still many more shopping days.

James Tenser
Guest
10 years 5 months ago
Retailers have been hitting their heads against the wall for several holiday cycles now. So it’s no surprise that it feels good to stop. It is heartening that sales are up on a relative basis compared with a year ago, but I’d resist calling this a full-blown recovery due to some fundamental unknowns. One indicator I’d like to see, mentioned above, is the relative willingness of shoppers to use credit versus pay as they go. Another would be markdown trends in the remaining weeks of the holiday season. While investors are feeling pretty good about their portfolios of late, I am hesitant to link current investment performance too tightly to middle-class confidence. Remember, for every bargain buyer of shares in the past two years, there was a bargain seller who locked in losses, probably to cover mortgage payments or credit card bills. November’s promotions helped motivate shopper action–a sign that there is still some cash in people’s pockets. Hanukkah came early too, adding incrementally to early purchases in some regions. If this sounds like a… Read more »
Anne Bieler
Guest
Anne Bieler
10 years 5 months ago

The good news in November reflects a combination of pent-up demand as well as better value offers and fear of stock outs of popular items. Last year, fear of lower sales kept inventories tight and pushed early discounts; some items were unavailable in December. With lessons learned by shoppers and retailers and bit more confidence, shopping earlier was the best strategy.

Ted Hurlbut
Guest
Ted Hurlbut
10 years 5 months ago

I don’t think the news that November was a good month for retail surprised too many people. What is a surprise is that it turned out to be as good as it was, especially Thanksgiving weekend.

I’m cautiously optimistic. After the past couple of holiday seasons disappointed, I think there’s a good possibility that sales may come in better than expected this year. Still, there are a lot of headwinds, strength is not across the board yet, and this morning’s unemployment report could very well put a damper on consumer sentiment going forward through December.

Craig Sundstrom
Guest
10 years 5 months ago

Don’t you worry yourselves, naysayers, Santa is loading up at the coal yard for you right now (even David has downgraded his assessment from “exploding” to “booming.” 🙂 Seriously, though, it’s hard to get too excited about one month (particularly given the rabidity of some of the promoting); another way to look at it: even if the forecasts are–on average–correct, half the time the actuals will be higher, and the other half they will be lower.

As I write this, the unemployment rate has risen–again–so by Monday we will be back to fretting…but enjoy the weekend and, of course, Happy Holidays!

Ed Rosenbaum
Guest
10 years 5 months ago

I have read all the opinions so far and agree with most of the comments, particularly my friend Paula. She seems to be right on target with the next ten days sales numbers being the determining factor as to the level of success this season.

However, I have said this before and will say it again; Chanukah is early this year. We will light the third candle this evening. Therefore, most observant Jews have already done the bulk of their buying for the season. That means there has to be some serious money spent even after the ten days mentioned by Paula. Here’s hoping. If not, there will be some very disappointed retailers and analysts.

David Biernbaum
Guest
10 years 5 months ago

I am not surprised by all the cheerful reports about November sales for retailers. After all, the comparison is against last year which was one of the worst retail years in recent history. I think that some retailers are also seeing a slight bounce back due to the reversal of over-SKU rationalization. Last year the consumers had fewer choices of what to buy, and as a result, they simply bought less.

Doug Stephens
Guest
Doug Stephens
10 years 5 months ago

With prices cut to the bone, more stores open on Thanksgiving and the entire season starting almost a month earlier than usual, the increase is no surprise.

What remains to be seen is how much profit got put in the bank. When a mere 20 percent discount means you have to sell almost twice the amount of goods to make the same net profit, let’s just say I’m less optimistic.

Kai Clarke
Guest
10 years 5 months ago

Despite all of the other unemployment numbers, the stock market continues to surge as do the shopping numbers. Our economy is expanding despite the presence of fewer workers. This means that our productivity is increasing, and that demand is pent-up. So long as we have credit, our nation can weather the ebb and flow of unemployment and the lack of cash flow it means for many Americans. We will continue to see this growth with more positive signs from the stock market, real estate and eventually the employment numbers as well.

wpDiscuz

Take Our Instant Poll

How surprised are you at the strength of November’s retail sales?

View Results

Loading ... Loading ...