Tuesday, December 30, 2003

Retail boosted by last-minute buying


Internet and electronics big winners

By Anne D'Innocenzio
The Associated Press

NEW YORK - A late spending surge helped boost sales last week for many merchants, according to data released Monday, offering relief to retailers in a holiday season that is still projected to be only modestly better than a year ago.

Internet sales and consumer electronics were the winners, both rising strongly from a year ago, but sales at department stores and toy stores fell.

Unlike a year ago, when last-minute spending was insufficient to help retailers meet their holiday goals, this year's finale was strong enough to offset December's earlier weakness, according to Michael P. Niemira, chief economist and director of research at the International Council of Shopping Centers.

"I'm much more upbeat than I was a week ago," said Niemira, who also is a consultant at ShopperTrak, which will release today data showing sales through Saturday. "The surge was late, but it was enough to save the season."

ShopperTrak tallies total sales at 30,000 retail outlets.

"The worry level was high, but sales came through - but not evenly," Niemira said. He added that the day after Christmas, which starts the post-holiday sales, was much stronger than a year ago.

Niemira thinks that overall same-store sales growth is on track to meet his forecast of 4 percent for the November-December period, reduced earlier in the season from 4.5 percent. That's on top of a meager 0.5 percent gain during holiday 2002 from the previous year.

Same-store sales growth, or sales at stores opened at least a year, are considered the best indicator of a retailer's health.

While modest - given that stores hoped to benefit more from a recovering economy - the expected gain will still be the biggest since 1999, when Niemira's tally posted a 5.4 percent increase.

The nation's retailers are slated to report final December same-store sales figures Jan. 8.

Monday, MasterCard Advisors, a unit of MasterCard International, said total sales were up 6.5 percent from Nov. 28 through Dec. 24, compared with a year ago. The figures were adjusted to reflect the extra day this holiday season.

Internet and catalog sales rose 6.5 percent, MasterCard Advisors said, while consumer electronics and appliance store sales were up 6.7 percent. Sales at home furnishing stores increased 3.9 percent. But apparel stores were up only 1.65 percent, department store sales fell 1.4 percent and sales at toy stores declined 7.7 percent.

One major plus for the season is that profits are expected to be healthy because of lean inventories and the lack of across-the-board discounting that characterized last year's season, Phil Kowalczyk, of the retail consulting group Kurt Salmon Associates, said. Even as the season got more challenging, stores went ahead with another round of planned discounts, but they "weren't panic promotions," he said.

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