Retail sales resilient in final holiday stretch

NEW YORK (Reuters) - Retail sales look poised for a solid finish to
the holiday season as warm weather and deep discounts encouraged
shoppers to hit stores or go online to snap up last-minute gifts,
according to data released on Wednesday.
Sales in the week ending
December 24 soared 14.8 percent from a year ago to about $44 billion,
helped by Christmas Eve falling on a Saturday, according to ShopperTrak,
which monitors traffic at shopping malls. Good weather also helped as
snowstorms had blanketed some areas at the same time last year.
Sales on December 26, a public holiday this year, soared 25.5 percent to $7.1 billion, ShopperTrak said.
Steep discounts were prevalent throughout the season and drove the sales growth, but could crimp retailers' profits.
"The real issue is, what margins were those sales generated at because it was a very heavily promotional season," said Al Ferrara,
director of BDO USA's national retail practice. "The retailers, to
capture market share, were obviously marking down very heavily."
Amid
concerns about profit margins, the latest data had little impact on
retail stocks with the S&P Retail index ending down 1.05 percent,
only slightly better than the 1.25 percent drop in the broader S&P
500 index.
Sales at stores in the week ending December 24 soared
37.8 percent from sales in the week ending December 17, ShopperTrak
said, suggesting procrastinators were drawn in by offers.
"Consumers
are willing to get up and go out there if they feel like they're going
to get some value for their dollars," ShopperTrak Founder Bill Martin told Reuters.
Besides
ShopperTrak, two other sets of data indicated solid sales last week.
The ICSC/Goldman Sachs weekly chain store sales index rose 4.5 percent
during the week ending December 24, versus a holiday-shortened
pre-Christmas Day week in 2010. Redbook Research put the year-over-year
gain at 4.3 percent.
Adjusted for the calendar mismatch, the
ICSC/Goldman index rose 0.9 percent for the week ending December 24,
compared with the prior week.
"The finish is solid and the season
itself was good," said ICSC Chief Economist Michael Niemira. "November
was on the soft side but December will be better."
December sales so far are up 4.7 percent, while November sales rose 4.1 percent, ShopperTrak's Martin said.
ShopperTrak
predicted in mid-December that sales for the two months combined would
rise 3.7 percent, while the National Retail Federation expects a rise of
3.8 percent and the International Council of Shopping Centers is
looking for a 3.5 percent increase.
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Analysts previously said they expect Macy's and Wal-Mart Stores Inc to be among the big winners this holiday season as they had the right level of promotions for their shoppers, while Gap Inc and Abercrombie & Fitch Co may have missed the mark.
Visits to stores rose 6.5 percent in the week ending December 26, according to the NPD Group,
a market research firm. The conversion rate, which measures the
proportion of shoppers making a purchase, was 67.9 percent. That was
down slightly from the previous week, but ahead of the first part of
December, NPD data show.
"Major players, such as Macy's, are
fine," Niemira added. "Specialty stores are likely to be more uneven.
Specialty apparel seems to have been hit by abnormally warm weather.
Sales were on the slow side and there has been more discounting
consequently."
The biggest shopping malls and regional malls saw
the strongest customer traffic since the first week of 2011. Factory
outlets remained busy, but less so than the prior week, he said.
THE RISE OF ECONOMY AND E-COMMERCE
Wednesday's
retail data points underscore recent economic data that show the U.S.
economy is in recovery mode, albeit slowly. U.S. consumer confidence
rose more than expected in December, hitting an eight-month high, as
Americans grew more upbeat about the labor market and their financial
situation, the Conference Board said on Tuesday.
That followed a report early in December showing U.S. unemployment at the lowest level since March 2009.
However, U.S. house prices are still falling, tempering economic optimism, and some retailers, such as Sears Holdings Corp, are suffering.
Part of the problem for chains such as Sears and the now-shuttered Borders Group
may be competition with online retailers, who saw faster sales growth
this holiday season, suggesting e-commerce took market share from
brick-and-mortar stores.
Online sales, still a small component of overall sales, continued to grow at a faster clip than sales in stores, according to comScore data on Wednesday.
Online
spending in the United States reached a record $35.27 billion from
November 1 through December 26, up 15 percent versus the corresponding
period last year, comScore reported.
For the week ending December
25, consumers spent $2.83 billion online, up 16 percent from the
corresponding period in 2010, comScore also said.
"E-commerce is going to be awesome this holiday and retail will be mediocre," said Michael Rubin, head of Kynetic, which owns online retail businesses Fanatics, Rue La La and ShopRunner.

+1 =515 looks like positive retail numbers out of US