A last-minute rush to the shops wasn’t soon enough or strong enough to boost a lackluster holiday retail season.
Sales in the country’s biggest chain stores from Wal-Mart to Walgreens rose only 2.7 percent in December compared with December 2003, the International Council of Shopping Centers reported Thursday.
Combined with November’s measly 1.8 percent increase, the annual holiday season tote among the 77 national retail giants tapped by the trade organization was only 2.3 percent better than in 2003.
That’s far below last year’s modest but acceptable 4 percent increase over 2002 and the 4 percent rise that industry leaders had been forecasting for this year as well.
Not all retailers are licking wounds.
Target’s December sales at stores open at last a year were up 5.1 percent from December 2003.
"The holidays were very good for us," said Craig Simonds, manager at the Chandler Target store. "Sales were sluggish at the beginning, but they picked up, and we were very happy by the end."
Luxury stores mostly fared well. Neiman Marcus and Chico’s posted double-digit gains. Nordstrom nearly did with a 9 percent increase over 2003.
At Scottsdale Fashion Square, late December traffic was strong, and shops like Louis Vuitton, Coach and Burberry were moving lots of merchandise, said Chris Stallman, the mall’s marketing manager.
"The luxury retailers were extremely positive," he said. "They said sales were strong through Christmas and the week after. Some were even running out of inventory."
Coach sold out of at least one popular but pricey handbag even before Christmas, Stallman said.
But for the bulk of the big national retailers, the holidays were a mixed bag. Sales at stores open at least a year for merging Sears and Kmart both slipped in December—down 3 percent and 4.6 percent respectively — compared with a year earlier.
Rival J C Penney didn’t fare much better with a 1.2 percent dip.
Wal-Mart, which was late to start discounting this year, came in 3 percent better than December 2003, a big improvement over the retail behemoth’s early season results. Furniture stores sales slipped 6 percent and shoe store sales slipped 0.6 percent in December.
Dismayed by lack of sales early in the month, retailers finally started slashing prices in the waning days before Christmas, said Michael Niemira, chief economist for the International Council of Shopping Centers. That is one factor in lowering the total, he said.
"Ironically, consumers slowness in shopping this year and tight-fisted spending in November was, according to our survey, not so much a concern about prices, but a concern about their own finances, which was brought home by slightly weaker economic conditions in November and a back-up in the pace of jobless claims filings late in the month and into early December," Niemira said.
The percentage of annual sales rung up in November and December also slipped this year, Niemira said. In 2003, 26 percent of the annual take happened in the last two months. In 2004, only 22.2 percent of the annual sales were rung up in November and December.
"That’s the lowest share on record and one-tenth of a percentage point below the dismal 2002 season," Niemira said.
Niemira said some of that could be due to a boom in gift card sales, which aren’t counted until the cards are redeemed.
If that is the case, it should boost January sales, he said.
In the Chandler Target, gift card sales were brisk, Simonds said. Many recipients already have been in to use them, but Simonds said he expects redemptions to continue strong into January.
But mostly, Niemira said, the holiday sales figures show an overall slowdown in spending that began mid-year.
For all of 2004, U.S. sales were up a healthier 3.8 percent.
Niemira is predicting a more modest 3 percent annual increase for 2005.
That’s because he sees the big spenders finally getting spent out.
"We may have seen the peak in the growth rate of the luxury segment," Niemira said. "We need the rise from the lower end, but I don’t see that happening." Well-heeled shoppers spend about four times more than lower income households, he said.