Blog: November sales chill
Leonie Barrie | 8 December 2008
A surge in shopping on Black Friday, the day after Thanksgiving, wasn’t enough to bring much seasonal cheer to US retailers in November, despite their attempts to attract shoppers with hefty markdowns and other promotional deals. A brief flurry of spending petered out as the weekend progressed, leaving many stores fearful about what lies ahead in December – a crucial month in the retail calendar.
But there were also other factors at play in November. A calendar shift this year eliminated a week of holiday shopping from the month’s results, which not only cut into sales but made for tough comparisons with last year when figures included a full week of post-Thanksgiving trade. And for retailers with international operations, a strengthening US dollar cut sales overseas.
On the upside, lower gasoline prices left consumers with a larger disposable income than in recent months, and cooler weather in the east finally spurred sales of winter clothes.
Discounter Wal-Mart Stores continued to be the brightest performer, with aggressive price cuts and new apparel merchandise helping drive a 3.4% rise in same-store sales. Specialty clothing retailer Gap Inc also surprised, with a sales decline that was less than had been expected. But department stores continued to disappoint, with Macy's posting a 13.3% same-store sales decline.
Looking ahead to December, initial signs suggest consumers are already further ahead in their shopping than they were a year ago – which is not good news for retailers as it points to traffic and sales slowing over the next few weeks.
Stores will also need to offer even more aggressive discounts to entice shoppers who are sticking to tight budgets and are now on the lookout for items that have been marked down. But this will probably hurt fourth-quarter earnings as the price cuts eat into retailers’ margins. There are also fewer days between Thanksgiving and Christmas this year, so retailers will have to work even harder to make up lost ground.
Consultancy TNS Retail Forward is warning of “grim” holiday sales – but also suggests sales should begin to bottom out in December. It adds that business will continue to skew toward value-driven retail formats like discount stores, supercenters and warehouse clubs.
Fashion retailer H&M and UK based glove and leather manufacturer Pittards both say they are monitoring the situation in Ethiopia closely after the country's government declared a state of emergency af...
Increasing competition for garment sourcing contracts is seeing China not only being challenged by other countries in Asia, but by sub-Saharan African and even Russian suppliers too. And it is pushing...
The monthly minimum wage for workers in Cambodia's textile, garment and footwear sector is set to rise to $153 from January next year, following a vote on the issue last week. The increase marks a ris...
The results of two highly-anticipated initiatives in the sportswear sphere were revealed last week: the launch of Under Armour’s new UAS lifestyle brand and the first pair of running shoes created at ...
- Fashion fit for the future – strategies for speed
- How PVH is paving the way for connected apparel
- Digitisation to drive new apparel-making models
- Pakistan industry seeks help to kickstart exports
- Under Armour Lighthouse will disrupt production
- US Q3 in brief – Columbia Sportswear, HanesBrands
- Primark sourcing chief Gordon steps down
- Child refugees found in Turkey apparel factories
- Chinese manufacturer invests $20m in US facility
- Managing change in the move to new tech tools
- Africa-Med strategic sourcing review – comparing East Africa, North Africa and Turkey
- REPORT BUNDLE: Africa-Med, Southeast Asia and Central America strategic sourcing pack
- Southeast Asia strategic sourcing review – a focus on Cambodia, Vietnam and Myanmar
- Global market review of lingerie – forecasts to 2022
- Apparel (GLOBAL) - Industry Report