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NEW YORK – A decline in sales at the nation’s retailers in November after two consecutive months of gains is an ominous warning sign for the holiday shopping season and for an economy in the early stages of a fragile recovery.
Many merchants may be forced to discount more than they planned to get financially strapped holiday shoppers to buy after last weekend’s respectable bargain buying surge didn’t offset weak spending for the rest of the month.
The 0.3 percent decline, according to one measure, is especially worrisome because it comes on top of a freefall last November as spooked shoppers went into a defensive crouch after the financial meltdown. Analysts had expected a solid gain. Consumer spending accounts for 70 percent of all economic activity.
According to sales results announced Thursday, a diverse group of stores, including Cincinnati-based department store chain Macy’s Inc., Saks Inc., New Albany, Ohio-based teen merchant Abercrombie & Fitch Co. and discounter Target Corp. posted sharper-than-expected sales declines. Children’s Place Stores Inc. was among the biggest disappointments, suffering a steep drop.
Analysts caution that a better gauge of the month may lie in government retail sales numbers, slated to be released Dec. 11. The numbers offer a broader view of spending, including online sales and results from electronics chains – two bright spots for the holiday season, analysts said. Thursday’s figures also don’t include Wal-Mart Stores Inc., the world’s largest retailer, which stopped releasing its monthly figures after announcing April results.
Warm weather also was a factor in depressing shoppers’ appetite for seasonal apparel such as coats, analysts said.
Nevertheless, November’s trends show that Americans mostly shop only when bargains are deep.
“I think we are seeing the true stripes of the consumer,” said BMO Capital Markets analyst John Morris. “She is still motivated by need rather than want.”
