Advertisement

Our coronavirus coverage is free for the first 24 hours. Find the latest information at tampabay.com/coronavirus. Please consider subscribing or donating.

  1. Archive

Not-so-happy holidays

Elena Robinson shops at Wal-Mart for groceries and household goods, but not clothing.

"I can get nicer things at better prices from places like TJMaxx, Ross and Marshall's,'' said the 29-year-old St. Petersburg nurse. "Wal-Mart doesn't have the fashion brands.''

The chain's recent self-inflicted misfires include:

* Trying to sell trendy apparel.

* A decision to stop taking layaway orders a week before, rather than a week after, Thanksgiving.

* Disruptive remodeling work in a quarter of all stores that was not halted for the holidays.

* The difficulty of beating month-to-month comparisons this fall with the consumer buying spree ignited by last year's hurricane rebuilding around the Gulf Coast. - Growing concerns that lower income wage earners are squeezed by energy prices and a slowing economy.

Put it all together and you have many experts' explanations why Wal-Mart Stores Inc. on Thursday reported its first decline in a decade in monthly sales of stores open at least one year. The world's biggest retailer is struggling so hard to find firm footing at its U.S. stores that on Thursday executives all but wrote off the rest of the crucial Christmas holiday season.

After reporting a 0.1 percent November sales decline in stores open more than a year, the Bentonville, Ark.,-based retail giant said December won't be much better. The company forecast a meager same-store sales increase of between 0 and a 1 percent for the big finish to the season.

"Factors impacting our December sales estimate include continued challenges in our apparel and home business,'' said Tom Schoewe, the chain's chief financial officer, who doesn't see those categories turning around until spring.

"This is pretty discouraging,'' said Ken Perkins, president of retail Metrics LLC, a Swampscott, Mass., firm that tracks retail sales. But he added that Wal-Mart's weak sales "will not be a harbinger for broad-based weakness across the retail sector.''

Most of the 60 chains reporting November sales this week issued far more robust sales reports. Spurred by aggressive price promotions to energize holiday shoppers, retailers brought slumbering shoppers out in force. A survey by BIG Research estimated the average Black Friday shopper spent $360, 19 percent more than the opening day of the 2005 season. Excluding travel, online spending surged 26 percent to a one-day record of $608-million on this week's Cyber Monday (so dubbed for its heavy online shopping), according to ComScore Networks, which expects the record won't last two weeks.

Usually a last minute affair for retailers, the holidays again appear headed down to the last two weeks.

Micheal Niemira, chief economist for the International Council of Shopping Centers, echoed the optimism even as he lopped a half percentage point from his sales gain momentum estimate because of Wal-Mart's difficulties.

He now expects same-store sales to increase 2.5 to 3 percent through the two-month season, well below the National Retail Federation forecast of an overall 5 percent gain of general merchandise sales to $457-billion. Sales of stores open at least one year, called same-store sales, are the preferred yardstick of individual consumer spending rather than overall sales because they factor out population gains. Through November, Niemira's estimate was only 2.1 percent ahead of a year ago.

"The Thanksgiving weekend provided some encouragement,'' he said. "But November's softness will have to be made up in December.

The November performance varied by store type. Department stores were up 4.6 percent, luxury chains were up 5.1 percent. But apparel chains were up a paltry 0.2 percent and discount stores were up only 1 percent. Wal-Mart rival Target was up 5.9 percent.

Richard Hastings, who charts retailer credit ratings for Bernard Sands, thinks it's not just Wal-Mart.

"This could mean that a big decline in residential construction employment is showing up in the stores where so many subcontractors shop,'' he said

Donna Marlow, however, was happy with her Black Friday fortunes at Wal-Mart.

She camped out overnight at the front door of a northwest St. Petersburg Wal-Mart to be first in line for a 52-inch RCA projection screen HD TV set for a bargain $472.

"The security guard stayed right there stopping anybody who tried to crash the line,'' she said.

By 5:15 a.m., however, she was too tired to do any more Wal-Mart shopping. So she went home with a new TV to catch some sleep.

Mark Albright can be reached at albright@sptimes.com or (727) 893-8252.

YOU MIGHT ALSO LIKE

Advertisement
Advertisement