THANKSGIVING MAY BOOST RETAIL SALES IN NOVEMBER
Byline: Melanie Kletter
NEW YORK — Shoppers came out in full force following the Thanksgiving holiday, giving a much-needed boost to business that should help some retailers meet their November sales plans.
But the surge at month’s end was not enough to offset three straight weeks of below-plan results for many retailers. Among broad-lines chains, for example, Deutsche Banc Alex. Brown is projecting below-plan results are likely to be logged by Kmart, Federated Department Stores, Wal-Mart Stores, May Department Stores Co. and J.C. Penney.
The weakness was fed by soft apparel sales, which were held down by unseasonably warm temperatures in much of the country. According to LJR Redbook, “Sales of cold-weather apparel did not accelerate markedly, and retailers continue to wait for falling temperatures to ignite this business.”
Other seasonal holiday goods did well, LJR noted, including toys, electronics, jewelry and millennium-related items.
“I think the November figures are going to be surprisingly weak, given that business Thanksgiving weekend was explosive,” said retail consultant Walter Loeb of Loeb Associates. “The two weeks prior to Thanksgiving were very weak, partly because of the weather, and partly because of a lag in consumer confidence. Some chains pulled it out, and some did not.”
Based on its same-store sales index of 100 stores, Deutsche Bank is estimating same-store sales for November will advance an average of about 4 percent.
However, Joe Grillo, retail analyst at Deutsche Banc, noted, “Sales and earnings momentum is strong [since Thanksgiving] and we are quite bullish about the prospects for December.”
Banc of America estimated same-store sales grew an average of 6 percent Thanksgiving weekend, and projected the holiday season would be “back-loaded,” with many purchases made even later than in 1998.
“A strong Thanksgiving confirmed expectations for heavy sales volumes to fall close to the holiday and into January,” said Thomas Tashjian, retail analyst at Banc America.