[null, {"document_url": "http://blogs.marketwatch.com/behindthestorefront/2013/12/31/retailers-december-sales-miss-mark-despite-sales-gain-last-week/", "unformatted_src": "http://s.wsj.net/public/resources/MWimages/MW-BR690_shoppi_MG_20131231112142.jpg", "src": "http://s.wsj.net/public/resources/MWimages/MW-BR690_shoppi_MG_20131231112142.jpg", "formatted_filename": "MW BR shoppi MG", "rendered_width": 569, "rendered_height": 398}, null]
Behind the Storefront

The business, and art, of retail

Retailers’ December sales miss mark despite sales gain last week


By Andria Cheng 

The Johnson Redbook Index, which samples large U.S. general merchandise retailers representing about 9,000 stores, said retailers’ December same-store sales rose 3.5% so far this month, missing a gain target of 3.8%. December sales also dropped 0.7% from November, missing a target of a 0.4% drop.

“Markdowns should deepen in the final week and through January since missed sales targets imply inventory overhangs which must be cleared before the spring season starts,” Redbook said in a report.

After what looks to be a disappointing month in terms of sales, retailers increased discounts in the run up to Christmas, leading sales last week to outpace other weeks so far this holiday season.

Same-store sales for the week ended Dec. 28 rose 3%, the biggest gain in 10 weeks, according to an International Council of Shopping Centers and Goldman Sachs survey. Almost 21% of retailers were offering a store-wide promotion on Christmas Eve, compared with only 17% last year, ICSC said in a report, citing SaleTally. It said the average depth of store-wide discounts was at 30% on average, compared with 25% off last year.

“Clearly, this has implications for profits, but it did seemingly generate sales,” said ICSC’s chief economist Michael Niemira in a report.

Among the segments tracked in the ICSC-Goldman Sachs survey, department stores look to get the biggest boost last week, followed by discounters and dollar stores. Its data showed that business at electronics stores, wholesale clubs and apparel stores was weaker than last year.

“Although business was brisk in those final pre‐Christmas days and for the week as a whole, attention now turns to holiday gift‐card redemptions,” Niemira wrote, adding consumers’ average share of spending in the form of a gift card rose to a record 23.7% this year. That means the holiday season for retailers will likely extend into January because gift cards don’t count as sales for retailers until after they are redeemed.

National Retail Federation data also forecast record gift card sales this holiday season.

With many retailers still having one more month to go to wrap up their key fiscal fourth quarter, the game is still on to entice shoppers to spend and get the clearance items early before discounts become deeper at the cost of profit.

Target Corp. /quotes/zigman/253872/delayed /quotes/nls/tgt TGT , whose sales and traffic likely were hurt by its card-hacking incident, is featuring a “get fit event”  on its website to tie in with New Year’s resolutions. Wal-Mart Stores Inc. /quotes/zigman/245476/delayed /quotes/nls/wmt WMT is hosting a “super savings celebration.” Gap Inc. /quotes/zigman/227242/delayed /quotes/nls/gps GPS is featuring its new spring assortment at the top of its home page. J.C. Penney /quotes/zigman/237947/delayed /quotes/nls/jcp JCP , meanwhile, is hosting an “appreciation sale” through Jan. 4.

Best Buy Co. /quotes/zigman/219712/delayed /quotes/nls/bby BBY , for its part, is pushing New Year’s sale event, dangling deals including a free iPhone 5C with a two-year contract. Pre-Christmas, the $99 phone was discounted for sale at $50.

– Andria Cheng

– Follow her on Twitter @AndriaCheng

More news from Behind the Storefront:

Target’s brand image falls to lowest level since at least 2007

Retailers push shoppers to use gift cards

Online is the season’s bright spot

Retailers’ sales fall in final week ahead of Christmas




About Behind the Storefront