Thursday, December 02, 2004

November Sales Prove a Retailing Turkey

The nation's major retail chains today reported mostly disappointing sales results for November despite price-slashing promotions during the Thanksgiving holiday weekend.

The weaker than expected results afflicted a wide variety of retailers — from discount giant Wal-Mart to high-end Nordstrom — and raised concerns about the prospects for the remainder of the holiday shopping season. Some analysts lowered their sales forecasts as a result of the November figures.

On Wall Street, stocks were mixed, with the Dow Jones industrial average posting a slight loss in early afternoon trading.

The lackluster November sales at many retailers were reported a few days after some research and credit card companies observed a significant jump in sales volume on the Friday after Thanksgiving, the traditional start of the holiday shopping season. But sales sagged on Saturday and ended marginally higher on Sunday, leaving many retailers disappointed.

The International Council of Shopping Centers said that November comparable store sales — sales results from stores open at least one year — rose 1.7% from the same month last year, according to news service reports. That was far below expectations and one of the smallest increases this year.

"It's a bad number," ICSC chief economist Mike Niemira told Bloomberg news service. "We have widespread weakness and comments from some retailers now that they'll step up promotional activity. They usually wait a little bit."

Normally, a tanking domestic economy takes the pressure off the Fed to raise interest rates. But when the pressure is coming from foreign exchange issues (the devaluing of the dollar), the situation is more complicated. Sir Alan has two consistent problems (foreign flight and inflation) if the economy is healthy, two conflicting problems if it ain't.


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