Table of Contents
NEW YORK — While a record Black Friday helped drive retail sales in November, that performance failed to overcome the impact of Superstorm Sandy.
While a record Black Friday helped drive retail sales in November, that performance failed to overcome the impact of Superstorm Sandy.
Industry watchers and analysts say that a strong start to the holiday shopping season over the Thanksgiving weekend wasn’t enough to fully offset the slow start caused by the storm.
Advisors’ SpendingPulse, which tracks spending across all payments, including cash, said that Sandy knocked off nearly $4 billion of retail sales the first week of November in the hard-hit Mid-Atlantic and Northeast region, which accounts for nearly a quarter of all retail sales nationwide.
With several major retailers reporting their monthly sales at the end of November, those that gained volume over last year saw only a minimal improvement while others reported that this year’s sales fell short of those in November 2011.
At Target Corp., for instance, sales at stores opened at least a year fell 1%, hurt by weak sales in the first two weeks of the month. Analysts surveyed by Thomson Reuters had expected a 2.1% increase.
As was the case with many of the retailers that continue to report monthly revenue, Target said weak sales early in the month offset stronger sales later. The South was its strongest region, while the Northeast, hard hit by Sandy, was weaker.
The storm stunted enthusiasm among shoppers early in the month as stores were preparing for the busiest shopping period of the year — the two-month stretch in November and December that accounts for as much as 40% of some retailers’ annual sales.
"It really took away the punch bowl for retailers and put them behind the eight ball heading into the crucial weekend," Ken Perkins, president of the market research firm RetailMetrics told the Associated Press news agency last month.
Despite the impact of the storm, some retail chains managed to have a relatively strong month.
At Costco Wholesale Corp., for instance, monthly sales increased by 9% and same-store revenue rose 6%.
Executives note that the same-store sales increase included a 6% rise in the United States and a 7% boost in Costco’s international business.
Inflation in gasoline prices and stronger foreign currencies positively impacted comparable sales for the month, they say.
Excluding these impacts, Costco says total company comparable sales for the month advanced 5%, with growth of 6% in the United States and 5% internationally.
Meanwhile, discount chain Fred’s Inc. reported that its overall November sales dipped 1%. with same-store sales for the month falling 3.6% after increasing by 1.5% in November 2011.
"November comparable sales were affected by the intensely competitive advertising and promotional environment surrounding Thanksgiving and Black Friday," chief executive officer Bruce Efird said, noting that the chain saw record layaway sales, which are not recorded as revenue until final payments are made.
"We continue to expect a stronger sales performance in the final months of our year, as the layaway program unwinds and our marketing programs for December and January go into effect," he said.
That optimism is being shared by others across the industry.
According to J.P. Morgan Chase & Co.’s Chase Holiday Pulse, the 2012 holiday season is projected to be a strong one.
"This year is looking like a merry holiday season for retailers," says Chase Paymentech executive vice president Mia Shernoff.
