Blog: Leonie BarrieRetailers slipped on more than snow

Leonie Barrie | 7 January 2011

Did US apparel retailers set themselves up for a fall this Christmas? From September onwards the sector has been building positive momentum, with back-to-school, Thanksgiving and then November retail sales results all indicating a solid start to what everyone hoped would turn out to be a bumper holiday season.

So it's no wonder analysts were banking on strong spending around Christmas itself. And it's perhaps not surprising that they were in the end disappointed, albeit by a narrow margin. After all, the International Council of Shopping Centers, which tracks 32 retail chains, said its index of December same-store sales was up 3.1% against a year ago, but came in below the forecast 3.5% rise.

Holiday 2010 no doubt released some pent-up spending early in the season, but shoppers' purses closed again in the run-up to the main event. But that's probably not surprising, since the backdrop continues to be marred by higher living expenses, including gasoline and food prices, which combine to hurt consumer confidence and mean they have less disposable funds. Throw in the higher cotton and transport costs, which will eventually filter through to in-store apparel prices, and it seems challenges are likely to linger well into 2011.

US retailers count the cost of December's snowfall


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