Friday, January 08, 1999
Holiday sales make comeback
Discounters lead retailers in late surge
BY LISA BIANK FASIG
The Cincinnati Enquirer
A run on discounted holiday gifts and warm-weather gear helped lift overall retail sales in December, making for a decent shopping season despite its slow start.
As had been expected, discounters such as Wal-Mart and some specialty chains tri umphed as shoppers hunted for value, while many department store companies limped along.
A notable exception: Federated Department Stores Inc., parent of Lazarus, posted a surprising 5.7 percent same-store increase, pushing its November-December sales increase to 3.5 percent compared with last year. That beats Federated's target increase of 2.5 percent to 3 percent.
Carol Sanger, a vice president at Federated, said the company made a concerted effort to improve merchandising, marketing and selling after a disappointing holiday last year.
“That effort paid off,” Ms. Sanger said. “We had specific strategies targeted for Christmas, and it worked.”
Retailers entered the 1998 holiday season in a funk as warm weather sent more people to the grill than to the malls. Unseasonable conditions persisted into December.
But analysts had predicted that department stores would be at the back of the pack all along, as fussy shoppers sought top value and convenience. Here's testimony: Wal-Mart posted a strong 9.4 percent increase in same-store sales, or sales at stores open at least a year. That compares with a 7.2 percent increase last year — not an easy number to beat.
“(It) was just a huge, positive surprise,” said Jeff Stinson, retail analyst for Midwest Maxus Research Group. “Wal-Mart has continued to surpass everybody's expectations.”
That Wal-Mart and chains such as the Gap stole department store business is evident. The Gap posted a 19 percent same-store increase in December, while Dillard's Inc., the new parent of McAlpin's, posted a 1 percent increase in December and a 4 percent decline in November. It's a similar story at Elder-Beerman Stores Corp., which reported a 1.1 percent department store increase in December and 3.4 percent decline in November.
J.C. Penney Co. Inc. said its same-store sales fell a dismal 7.6 percent.
A better time was had by Saks Inc., parent of Saks Fifth Avenue and Parisian. The chain posted a company-wide same-store sales increase of 3 percent, on target.
“It wasn't really promotional like a lot of other retailers,” said Julia Bentley, spokeswoman for Saks Inc. “On top of the 7 percent comp (sales) last year, I think we did very well.”
The sharp differences in reports made for a respectable middle of the pack, with sales advances ranging from 4 percent to 6 percent. Columbus-based Limited Inc. said its same-store sales rose 4 percent, while Kmart's same-store sales increased 4.2 percent. Dayton Hudson, the parent of Target, said its same-store sales rose 6.5 percent.
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