SALES BEGIN TO CLIMB AFTER STEEP DECLINE
Byline: Kristi Ellis
WASHINGTON — Retail sales dropped sharply in the days after the terrorist attacks on New York and Washington, but rebounded slightly at the end of September and early October, according to the Federal Reserve’s Beige Book report.
The luxury market took the biggest hit, while department and specialty stores remained soft and discounters held steady.
“Retail sales softened in September and early October in all [of the bank’s 12 districts] except in St. Louis, where sales were flat; in Minneapolis, where sales were considered normal; and in Richmond, where sales returned to pre-attack levels,” the Fed said in its report.
In New York, which lost about 7 percent of its office space when the Twin Towers of the World Trade Center collapsed, sales at Manhattan stores were down 20 to 30 percent for September, while comparable-store declines in the rest of the region ranged from 4 to 13 percent, according to the Fed.
General-merchandise stores reported sales were well below plan in September and early October, though discount and home-improvement chains said sales were close to plan. The report also noted a number of large retail outlets in the WTC complex were destroyed and virtually all major stores in lower Manhattan were closed for at least a week. One major department store remains closed indefinitely.
On the West Coast, retailers in San Francisco depicted a mixed picture.
“Other reports indicated only partial recovery, with sales generally running 5 to 10 percent below pre-attack expectations,” the report said. “Some department stores, which were hit hardest by the spending slowdown, commenced sizeable layoffs.”
By contrast, large discount chains reported year-over-year gains.
“Before Sept.11, the mood of retail respondents was cautious,” the Fed reported in its Boston district. “The terrorist attacks have shifted their outlook to complete uncertainty.”
Most retailers reported large-scale declines ranging from 20 to 30 percent during the weeks of Sept. 10 and Sept.17. However, by the end of September, sales had “reverted back to the patterns that prevailed before the terrorist attack.”
“Apparel sales appeared to be weaker than many retailers had expected,” the report said in the Philadelphia district. “Stores have been expanding price reductions in an effort to boost sales, but many merchants feel consumer confidence is too fragile to support a solid gain in sales, regardless of markdowns.”