| US retailers are relying on a post-Christmas surge to hit their holiday sales targets after the pre-Christmas period fell short of expectations.
Forecasters and retailers had looked forward to a sharp rebound this year, fuelled by a recovering economy, after a holiday season last year that was by some measures the worst for 30 years.
But while higher-income shoppers have opened their wallets, bolstering upmarket retailers' sales, lower-income shoppers have remained cautious.
Another factor skewing the results has been rapid growth in gift cards and certificates, estimated to account for 8-10 per cent of holiday sales this year. Retailers book revenues from these when they are redeemed by their recipients, not when they are first sold.
Wal-Mart, the world's biggest retailer, said on Friday that a rush in the days before Christmas had not been enough to lift monthly same-store sales growth, from stores open at least a year, above the low end of its 3-5 per cent forecast.
Wal-Mart said shoppers had generally shopped later than in previous years, adding that its "shopping card", or gift card, balance was up 20 per cent. It expected many cards to be redeemed by the end of December.
Mike Niemira, chief economist at the International Council of Shopping Centers, suggested Wal-Mart was not as accurate a barometer of wider retail sales as usual this Christmas since it did not attract higher-spending wealthier shoppers. He was sticking to his forecast of a 4 per cent increase in US same-store sales, after trimming that from 4.5 per cent in early December.
"It's been somewhat below expectations, but still moderately good," he said. "I think the words 'strongest holiday season since 1999' still work."
Kurt Barnard, president of Retail Forecasting, a consultancy, said he now estimated same-store sales would be up only 3.5 per cent in December - better than last year, but disappointing by historical standards. The lacklustre performance reflected the lack of job creation despite strong economic growth in the third quarter.
"Retail spending is a function of jobs," he said. "When jobs are scarce, and people are worried about losing them, they tighten their purse strings."
But he said higher-income shoppers had spent more freely since rising stock markets had boosted the value of their share portfolios.
Some mall owners remained upbeat about the holiday season. The Mills Corporation, which runs 14 "mega-malls" in large US markets, said the season was broadly in line with its expectations after a strong post-Thanksgiving weekend and a late surge, although the middle weekends were slower.
Sharon Campbell, marketing director of the group's Concord Mills mall in Charlotte, North Carolina, said customer traffic was up by an average of 10 per cent, year-on-year, in the final three days before Christmas.
Source: Financial Times | |
