NEW YORK (AP) — Black Friday was no match for Superstorm Sandy.
Major retailers from Target to Macy's reported weak November sales as the strong start to the holiday shopping season — including a good showing on the day after Thanksgiving — wasn't enough to fully offset the damage caused by Sandy earlier in the month.
The storm stunted enthusiasm among shoppers during the first couple of weeks of November just as stores were preparing for the busiest shopping period of the year, a roughly two-month stretch at the end of the year when retailers can make up to 40 percent of their annual revenue.
"It really took away the punchbowl for retailers and put them behind the eight ball heading into the crucial weekend," said Ken Perkins, president of RetailMetrics, a research firm Eighteen retailers on Thursday reported that November sales at stores open at least a year — an indicator of a retailer's health — through last Saturday were up 1.7 percent compared with the year-ago period, according to the International Council of Shopping Centers. That's well below the group's anticipated forecast for a 4.5 percent to 5.5 percent gain.
Only a small group of stores representing about 13 percent of the $2.4 trillion U.S. retail industry report monthly revenue, and the list excludes big merchants such as Wal-Mart Stores Inc., the world's biggest retailer. But the data still offers a snapshot of consumer spending, which accounts for 70 percent of all economic activity.
November sales show that stores were challenged by the impact of Sandy, which hit the Northeast on Oct. 29 and disrupted business activity and households for several days. MasterCard Advisors' SpendingPulse, which tracks spending, said that Sandy knocked off nearly $4 billion in retail sales during the first week in November in the hard-hit Mid-Atlantic and Northeast regions, which accounts for 24 percent of retail sales nationwide.
The disappointing November sales come after robust sales over the Thanksgiving weekend, the official kickoff to the holiday shopping season. A record 247 million shoppers visited stores and websites over the four-day period that started on Thanksgiving this year, up 9.2 percent of last year, according to a survey of 4,000 shoppers that was conducted by research firm BIGinsight for The National Retail Federation trade group. Spending over the four-day weekend totaled $59.1 billion, up 12.8 percent from 2011.
November sales affirm that this holiday season could be a difficult one for stores even though Americans' confidence is at the highest level since February 2008. Overall, the retail federation estimates that sales in November and December will rise 4.1 percent this year to $586.1 billion. But that's more than a percentage point lower than the growth in each of the past two years, and the smallest increase since 2009, when sales were nearly flat.
The modest forecast comes as U.S. shoppers face economic uncertainty. After all, many Americans are still concerned about the weak job market. And they worry whether Congress will be able to head off tax increases and spending cuts before the U.S. reaches the "fiscal cliff" in January. If Congress doesn't reach a deal, it would mean less money in Americans' paychecks.
Donna Herndon, who lives in El Paso, Tex., is closely watching her spending over the next couple of months. As a result, she said she'll probably spend $300 less than last year on her holiday buying.
"I don't want the first day of the year to come, and 'oh, my goodness,' I don't have the extra money to pay credit card bills," Herndon said. "I watch my money a lot more than past years, and I wait for it to go on sale." Michael P. Niemira, chief economist at the International Council of Shopping Centers trade group, said he's still sticking with his forecast for a 3 percent increase in sales for the holiday season. Originally, Niemira had expected November would be stronger than December, but now he anticipates the trend will be flipped.
"It's a very challenging season given the hurricane effects," Niemira said. "You're counting on a very strong finish." Kohl's Corp. certainly is hoping for a stronger finish to the holiday shopping season. Kohl's revenue at stores open at least a year fell 5.6 percent in November. Analysts surveyed by Thomson Reuters had expected revenue to rise 1.9 percent. The weakest regions were the Mid-Atlantic and Northeast, which were impacted by Superstorm Sandy, but Kohl's said all regions reported negative sales for the month.
Kevin Mansell, Kohl's CEO noted that results improved over Thanksgiving week and that Black Friday-related sales seemed to shift to online. Online sales for Thanksgiving week rose more than 50 percent, but most of these sales will be reported with December results, Mansell said.
Meanwhile, department store chains Macy's and Nordstrom Inc. reported their first monthly sales drops since late 2009 when the U.S. economy was just coming out of the Great Recession.
Nordstrom recorded a 1.1 percent decline in November, blaming the weakness not only on Sandy but also on tepid customer response to its semi-annual sales in the first half of the month. Nordstrom also said customers continue to prefer fashion and newness over bargains, which has made its clearance sales less enticing. The November figure was Nodstrom's first monthly decline since September 2009 when it had a 2.4 percent drop.
Macy's revenue at stores open at least a year fell 0.7 percent in November, compared with the 1.5 percent increase analysts expected. It was Macy's first monthly sales drop since November 2009 when it recorded a 6.1 percent decline.
"Despite the largest-volume Thanksgiving weekend in our company's history, we were not able to overcome the weak start to the month, which included the disruption of Hurricane Sandy," said Terry J. Lundgren, Macy's CEO.
Perhaps most surprisingly, Target reported that revenue at stores opened at least a year fell 1 percent, well below the 2.1 percent increase that Wall Street was anticipating.
Target said weak sales early in the month offset stronger sales later on. The South was its strongest region, while the Northeast, hard hit by Sandy, was weaker. Still, it said during a pre-recorded conference call that its profitability for the month remained "on plan." Analysts were puzzled by Target's disappointing sales performance in November. Earlier this month, the no. 2 discounter behind Wal-Mart had issued a profit outlook for the holiday quarter that beat analysts' estimates. The chain also opened its doors at 9 p.m. on Thanksgiving, three hours earlier than a year ago.
Given the tough spending climate, Brian Sozzi, chief equities analyst at NBG Productions, said: "Not everyone is going to win."
Black Friday didn't make up for Superstorm Sandy
NEW YORK (AP) — Black Friday was no match for Superstorm Sandy.
High School Sports Scoreboard: 03/07/2014
A roundup of scores from today's boys district basketball tournament games:Continued ...
Benzonia woman accused of prescription fraud
A Benzonia woman faces a felony charge after authorities said she fraudulently obtained hundreds of prescription pills.Continued ...
Panthers roar in regional final
Tim Reznich is hoping Frankfort can have a reunion with Nicole Marshall. And history says the Panthers may very well do that.Continued ...
Dispatch: Smart911 worth the price
An online service that gives Grand Traverse County 911 responders potentially vital information about callers cost taxpayers almost $19 per call in its first half-year of operation.Continued ...
TC native joins Team Blake on TV's 'The Voice'
Ryan Whyte Maloney finally can spill the beans: he’s a bona fide contestant on “The Voice.”Continued ...
Editorial: Beach testing grant exposes state's lack of commitment
The issue: GT Band to fund beach testing program for 2014. Our view: Grant points up state's failure to act.Continued ...
Passengers wrongly told TC airport was ‘closed’
Len Price and his family just wanted to get home. The Traverse City resident, 72, his wife, Linda, and son Logan were headed home from a Montana skiing vacation March 1 when weather caused long delays to their United Airlines flight.Continued ...
Pastor sues former church over contract
A controversial pastor’s public schism with his former church moved into the legal realm.Continued ...
OTP revives 'Sound of Music' after 20 years
Kathy Verstraete unearthed some familiar artifacts while she packed her mother’s home two years ago.Continued ...
Letters to the Editor: 03/07/2014
Where was Snyder?; Time to fight back.Continued ...
Building Permits: 03/07/2014
Building permits issued in Grand Traverse County:Continued ...
Frankfort coach elected president of coach association
A pair of girls basketball victories and a regional championship weren’t the only things Tim Reznich won this week.Continued ...
McBain captures Class C regional title
McBain rebounded from a poor shooting performance in the first half to overtake Beaverton and secure a 61-44 decision Thursday in a Class C girls regional championship game.Continued ...
And the Oscar (contest) goes to ...
Holly MacAulay did her homework and it showed when she her Oscar contest entry landed among four with perfect scores.Continued ...
The Record: 03/07/2014
Assumed names issued in Grand Traverse County:Continued ...
Downtown boat ramp hits bump
A plan to redesign a Boardman River boat launch in Traverse City is temporarily grounded because some local environmentalists weren’t consulted about changes.Continued ...
Back to school — for parents
Traverse City area parents will have a chance to go back to kindergarten at Grand Traverse Academy on March 13.Continued ...
Former TC student teacher returns as singer-songwriter
Josh Rose found musical inspiration in some unusual places growing up on a sheep farm in Michigan’s Upper Peninsula.Continued ...
Weekend in Brief: 03/07/2014
"Pure A Cappella" showcase; Mel Larimer concert series continues; and more.Continued ...
NMC's Birmley Road observatory open to public tonight
Two realms of science fascinate all types of people, regardless of age, said Jerry Dobek, a science and math instructor at Northwestern Michigan College.Continued ...
Night Life Calendar: 03/07/2014
What's going on after dark:Continued ...
Sports in Brief: 03/07/2014
Coach Mike Krzyzewski is out of the hospital and at practice with No. 4 Duke after feeling light-headed during a loss at Wake Forest. (Plus more)Continued ...
Movie Capsules: 03/07/2014
New this week — 300: Rise of an Empire — Greek general Themistokles leads the charge against invading Persian forces led by mortal-turned-god Xerxes and Artemisia, vengeful commander of the Persian navy.Continued ...
Community in Brief: 03/07/2014
Mexican Dinner Party benefit; Titan Student Choreographed Dance Concert; Grand Traverse Humanists meet; A Matter of Honor (AMOH) event; and more.Continued ...
- Poll: Does state set aside enough money to test beaches?
- High School Sports Scoreboard: 03/07/2014