December Sales Decline 1.7 Percent
Retailers cut inventory and offered unprecedented promotions for the 2008 holiday season, all in an effort to beat the forecasted tough economy. But it was not enough, according to the New York–based International Council of Shopping Centers. December sales dropped 1.7 percent during what is considered one of the most crucial sales months of the year.
“[Retailers] planned their inventory conservatively,” Jeffrey Van Sinderen, a retail analyst for Los Angeles–based financial-services firm B. Riley & Associates, said. “But it was not conservative enough.”
Department stores suffered the most during this tough December. Dallas-based luxury store Neiman Marcus reported a decline of 27.5 percent in December. Saks Inc. reported a decline of 19.8 percent. Nordstrom reported a decline of 10.6 percent.
Macy’s announced it would close 11 underperforming stores, including one in downtown Los Angeles, after reporting a December decline of 4 percent. Fresno, Calif.–based Gottschalks Inc. filed papers in November with the Securities and Exchange Commission stating there was a danger it would soon run out of money.
Discounters reported small gains. Wal-Mart reported same-store increases of 1.2 percent for December, which fell short of a forecasted increase of 2.8 percent by a Thomson Reuters survey of analysts. Ross Stores Inc. of Pleasanton, Calif., reported flat same-store sales for December.
Specialty stores offered one bright spot. City of Industry, Calif.–based Hot Topic reported an increase of 4.3 percent. Van Sinderen credited the gains to Hot Topic being in the lead for selling merchandise for the terrifically popular film “Twilight.”
Retailers will probably have to plan their 2009 inventory to be even leaner than the holiday inventory, Van Sinderen said. The upcoming year might prove to be very tough, said Jack Kyser, chief economist of the Los Angeles County Economic Development Corp. However, the economy will not be placed under a deep freeze, he said. He looked forward to President-elect Obama’s anticipated federal stimulus package to begin prodding business back to health in 2010. Recently approved bonds, such as Los Angeles County’s Measure R bonds for transportation projects, would also spur the economy, Kyser said.—Andrew Asch
