Holiday Sales Better ThanRetail Analysts Predicted

In late December, analysts were predicting this to be the third year in a row that December sales wouldn’t reach expectations for retailers, but a surge of shopping activity during the week of Christmas and the week afterwards pushed many retailers past sales expectations for the month.

“Upscale retailers and discounters performed well,” says Asma Usmani, an analyst with Edward D. Jones & Co. in St. Louis. “Middle-of-the-road department stores, like J.C. Penney, didn’t do well.”

Most national retailers reported December sales figures on Jan. 8.

Same-store sales for J.C. Penney Co. decreased by 2.3 percent during the four weeks ended Dec. 27 when compared to the same period in 1996. Net sales at Penney stores decreased by 1.3 percent to $2.44 billion from $2.47 billion during the same period. Total sales for the company for the 1997 Christmas season increased 8 percent to $3.85 billion from $3.57 billion in the comparable 1996 period.

By contrast, many upscale retailers were seeing substantial increases. December same-store sales increased by 8.8 percent at Neiman Marcus and 6.1 percent at Saks Fifth Avenue.

Wal-Mart Stores Inc. said a strong week before Christmas helped that company meet its “mid-single-digit growth target” for stores open for more than a year. Its sales were below plan in the first three weeks of the holiday season.

December same-store sales for all of Wal-Mart were up 7.2 percent. December same-store sales at Wal-Mart’s discount stores were up 7 percent, compared with 8.1 percent at the company’s Sam’s Club stores.

Usmani says Sam’s Club is usually a “drain” on the company’s same-store sales figures, but Sam’s Club aided the company’s bottom line during the Christmas season with the 8.1 percent increase.

Usmani says Wal-Mart typically looks for a 4 percent to 6 percent monthly increase in same-store sales. The company had an overall increase in same-store sales of 6 percent in October and 6.1 percent in November.

Wal-Mart had sales totaling $16.5 billion for the five weeks ending Jan. 2. That’s a 16.8 percent increase over the $14.1 billion in net sales for the same period a year ago.

For the same five-week period ending Jan. 2, Sam’s Clubs net sales were $2.5 billion, up 9.2 percent from the $2.3 billion in sales for the same period last year.

Wal-Mart’s major competitor Kmart Corp. reported less-impressive sales figures for the month of December. Sales at Kmart stores open more than a year rose 2.9 percent, at the low end of expectations.

Total sales in U.S. Kmart stores increased 3.4 percent for the five-week period ended December 31. Including results from divested international operations, total consolidated sales rose 0.2 percent to $5.17 billion, compared with $5.16 billion for the same period last year.

Dayton Hudson Corp., which owns Target and Mervyn’s stores, reported same-store sales for the five weeks ended Jan. 3 rose 6.4 percent over the comparable period last year.

Total sales at Dayton Hudson Corp. for December increased 11.2 percent to $4.71 billion from $4.24 billion a year ago. Target’s total sales for December increased 14.7 percent and comparable-store sales increased 6.4 percent.

Sears, Roebuck and Co. said its comparable domestic store revenues for the five weeks ended Jan. 3 rose 4.5 percent from the same period a year ago. Total domestic store revenues for the five weeks ending Jan. 3 were $4.51 billion, 5.4 percent above revenues of $4.28 billion for the five weeks ending Jan. 4, 1997.

Dillard’s Inc. announced a same-store sales increase of 2 percent for the month of December. Sales for the five weeks ended Jan. 3 increased by 7 percent to $1.1 billion compared to last December’s sales of $1 billion.

Stein Mart slated to open

Stein Mart, a discount clothing and housewares chain based in Jacksonville, Fla., has filed for a building permit to open a 37,733-SF store in the abandoned Wal-Mart building in Fayetteville’s Fiesta Square.

If approved, the store will have 33,040 SF of sales area. A lease is still under negotiation with Wal-Mart. No projected opening date has been set.

“We’d like to have a store open there in the spring, but that’s not certain,” says Mike Allen, vice president of real estate for Stein Mart.

Allen says Stein Mart has good name recognition in Arkansas because the company already has two stores in Little Rock and one in Fort Smith. The company has more than 150 locations nationwide.

The remaining 53,110 SF of space in the Wal-Mart building will be occupied by a Silk Tree Factory store. That store is expected to open in February, to the relief of Fiesta Square merchants who saw business drop after Wal-Mart closed the 16-year-old store there Oct. 7 to open a 202,000-SF Supercenter in Fayetteville’s Spring Creek Center.

Silk Tree Factory, which was founded in 1992, has 13 stores in six states. The only other Silk Tree Factory store in Arkansas is in Jonesboro.

Silk Tree Factory has yet to file for a building permit with the Fayetteville Planning Commission.

After the drop in sales in late October, merchants at Fiesta Square have apparently rebounded with a profitable Christmas season. And word of Stein Mart opening is just more good news.

Teresa Hahn, manager of Fashion Bug at Fiesta Square, says December sales were up 14 percent at the store when compared to December 1996.

Hahn says sales were down at her store by about 15 percent in October and foot traffic was down there by 50 percent, but sales were back to normal in November. n

Bill Bowden can be reached via e-mail at [email protected].