×
3 583
Fashion Jobs
FRASERS GROUP
Information Security Governance Analyst
Permanent · SHIREBROOK
L'OREAL GROUP
l'Oreal Luxe Multibrand Retail Account Manager
Permanent · London
COTY
National Account Manager
Permanent · London
TK MAXX
Loss Prevention Officer-tk Maxx High Street Kensington-Full Time
Permanent · London
HARRODS
Uniformed Security Officer - Thatcham Distribution Centre
Permanent · THATCHAM
HARRODS
Senior CRM Retention Executive
Permanent · LONDON
JOHN LEWIS
Section Manager Stock And Inventory – Nights
Permanent · BLETCHLEY
SELFRIDGES
HR Administrator (Part-Time)
Permanent · ENDERBY
SELFRIDGES
Digital Personal Shopping Content Manager
Permanent · LONDON
EVERLAST GYMS
General Assistant - Everlast Fitness
Permanent · POOLE
EVERLAST GYMS
General Assistant - Everlast Gyms
Permanent ·
ZARA
Zara High Wycombe - General Manager
Permanent · HIGH WYCOMBE
HEAD OFFICE
Senior Finance Analyst, Commercial Finance
Permanent · BRACKNELL
JOHN LEWIS
Section Manager Stock And Inventory – Nights
Permanent · BLETCHLEY
HOUSE OF FRASER
Loss Prevention Supervisor - House of Fraser
Permanent · READING
EVERLAST GYMS
General Assistant - Everlast Fitness
Permanent · CAMBRIDGE
BERSHKA
New Position - Bershka Operations Manager - Stratford
Permanent · LONDON
AVON
Internal Audit Manager Natura &CO
Permanent · LONDON
COTY
Trade Marketing Manager
Permanent · London
JOHN LEWIS
Section Manager Customer Delivery Hub
Permanent · LONDON
FLANNELS
Beauty Brand Manager – Pat Mcgrath Labs
Permanent · ROTHERHAM
CLAUDIE PIERLOT UK
Stock Contoller - Permanent - Selfirdges London
Permanent · LONDON
By
Reuters
Published
Jan 6, 2012
Reading time
3 minutes
Share
Download
Download the article
Print
Click here to print
Text size
aA+ aA-

December retail sales up, but discounts hurt profits

By
Reuters
Published
Jan 6, 2012

Many U.S. store chains had to resort to deep discounts to lure shoppers over the holiday selling season, cutting into profits even as overall December sales came in slightly above expectations.


Holiday Shoppers / Photo: Corbis

The news showed retailers are still struggling to convince post-recession U.S. shoppers to buy at full price, an ominous sign at the start of 2012.

"In recent years retailers have trained consumers to respond only to discounted pricing," said Lawrence Creatura, a portfolio manager at Federated Clover Investment Advisors.

"The risk is that if the retailer has to take those discounts further than planned, it can impact margins," he said.

Retailers such as J.C. Penney Co Inc, Gap Inc, Limited Brands, American Eagle Outfitters and Children's Place all called the holiday season highly promotional.

If shoppers turned out, they did so on condition of getting good deals, something experts said would continue into 2012.

"The consumer is in the driver's seat -- they have the power," said David Bassuk, head of AlixPartners retail practice. "We'll still see aggressive promotions in the next six months."

Penney cut its quarterly profit forecast, citing "higher markdown activity," and its shares fell. Kohl's also cut its holiday-quarter profit outlook after a disappointing December and a disastrous sales decline in November.

Macy's Inc, which expanded its late-night hours to more stores in the final days before Christmas and carried more exclusive goods, reported a better-than-expected 6.2 percent rise in December same-store sales and raised its profit and sales outlook for the current quarter.

"I think it is a market-share game right now," said Michael Niemira, chief economist of the International Council of Shopping Centers. "Some stores continued to impress, others to disappoint. The strong players in 2011 largely continued to perform well during the 2011 holiday season as well."

The ICSC sees same-store sales rising only 3 percent in January as people take a break from shopping after the holiday binge and inflation moderates.

Others agreed that January will be a ho-hum month.

"January sales should be OK. As our economy stumbles to its feet, we're likely to see the consumer continue to participate. It won't be anything dramatic but commerce will continue," Creatura told Reuters.

Most retail stocks fell on Thursday. The Standard & Poor's Retail Index was down 0.6 percent at midday, while the broader Standard & Poor's 500 Index slipped 0.2 percent. Macy's, TJX and Ross Stores were among the few retail gainers.

WINNERS AND LOSERS

Target Corp's sales did rise, but they missed expectations as the discounter faced a resurgent Wal-Mart Stores Inc. Target lowered its quarterly profit forecast.

Wal-Mart's decision to bring back a lay-away program has been a hit with shoppers and has challenged the company's rivals.

Gap was one of the biggest losers, with overall same-store sales down 4 percent.

Costco Wholesale's 7 percent same-store sales jump just missed the 7.6 percent increase Wall Street was eyeing.

Chains that have done well in recent months continued to do so in December, and several of those raised their profit forecasts, including Macy's, Limited Brands and Ross.

Even chains like TJX Cos, which runs the T.J. Maxx and Marshalls chains and had a much better-than-expected same-store sales gain of 8 percent, said it priced "aggressively."

Overall, sales rose 3.4 percent at the 22 retailers tracked by the Thomson Reuters same-store sales index, compared with the 3.3 percent analyst forecast. For a related graphic, click link.reuters.com/qak85s

Discounts, better news on the job market, and an upswing in the stock market spurred consumer spending, analysts said. But shoppers, especially those on tight budgets, could balk if they do not find bargains to their liking in the new year.

"The deals were good, I guess that's why I spent more," said Joanne Marcelle, 52, at an Old Navy store in New York's Herald Square on Wednesday.

But the unemployed Bronx grandmother said she still depends on bargains. "I can't say what the year will hold for us."

The National Retail Federation expects retail sales to be up 3.8 percent for the November-to-December period.

(Reporting By Phil Wahba and Dhanya Skariachan in New York, Lisa Baertlein in Los Angeles, Nivedita Bhattacharjee and Brad Dorfman in Chicago, editing by Maureen Bavdek and John Wallace)

© Thomson Reuters 2023 All rights reserved.