Post-Christmas Shopping Put Some Cheer in Retailers' Holiday
%%DynaPub-Enhancement class="enhancement contentType-HTML Content fragmentId-1 payloadId-61603 alignment-right size-small"%% "Sales were boosted by consumers redeeming their gift cards," ICSC chief economist Michael Niemira wrote. "A chill was certainly in the air during the past week, but consumers seemingly used that as an opportunity to head for the warmth of a shopping center."
Slower sales of gift cards this year, after several years of steady growth, had been a troubling indicator as the holiday season wound down. But Niemira anticipates the full December tally will come in 2.5% ahead of last year's numbers, slightly higher than his previous 2% forecast. In his report, he reaffirmed his earlier forecast of a 1% gain for the full season, a modest result compared to last year's 5.6% drop in sales. ICSC plans to release the combined November-December sales figures Thursday.
Caution for the Spring
Most retailers will close the book on the holiday season Thursday, when they release their December sales figures. A preview by Thompson Reuters estimated that December comparable sales -- at stores open at least a year -- should rise 1.3% above last year. But it noted that most Wall Street analysts are being cautious about prospects for spring. "Things are better, but they're still not healthy yet," Jharonne Martis, director of consumer research for Thomson Reuters, told the wire service.
Investors will be looking closely at retail by week's end, because the U.S. is expected to release its employment report Friday, which some observers expect to show a slowing of job losses. The double-digit unemployment rate has been the biggest business variable beyond retailers' control.
Analysts are concerned that stores that saw steady improvement this year, thanks to cost cutting and tight inventory controls, could start trending down again as they hit the anniversary of that belt-tightening. They fear that, lacking an increase in consumer spending, merchants will run out of places to cut costs and profits will slide again. A dip in unemployment would be a welcome indicator for investors in retail stocks.