Black Friday was no match for Sandy.
Major retailers from Target to Macy’s reported weak November sales as the strong start to the holiday shopping season — including a good showing on the day after Thanksgiving — wasn’t enough to fully offset the damage caused by Superstorm Sandy earlier in the month.
The storm stunted enthusiasm among shoppers during the first couple of weeks of November just as stores were preparing for the busiest shopping period of the year, a roughly two-month stretch at the end of the year when they can make up to 40 percent of their annual revenue.
“It really took away the punch bowl for retailers and put them behind the 8-ball heading into the crucial weekend,” said Ken Perkins, president of RetailMetrics, a research firm.
Eighteen retailers on Thursday reported that November sales at stores open at least a year — an indicator of a retailer’s health — through last Saturday were up 1.7 percent compared with the year-ago period, according to the International Council of Shopping Centers. That’s well below the group’s anticipated forecast for a 4.5 percent to 5.5 percent gain.
Only a small group of stores representing about 13 percent of the $2.4 trillion U.S. retail industry report monthly revenue, and the list excludes big merchants such as Wal-Mart Stores Inc., the world’s biggest retailer. But the data still offers a snapshot of consumer spending, which accounts for 70 percent of all economic activity.
November sales show that stores were challenged by the impact of Sandy, which hit the Northeast on Oct. 29 and disrupted business activity and households for several days. MasterCard Advisors’ SpendingPulse, which tracks spending, said that Sandy knocked off nearly $4 billion in retail sales during the first week in November in the hard-hit Mid-Atlantic and Northeast regions, which accounts for 24 percent of retail sales nationwide.
The disappointing November sales come after robust sales over the Thanksgiving weekend, the official kickoff to the holiday shopping season. A record 247 million shoppers visited stores and websites over the four-day period that started on Thanksgiving this year, up 9.2 percent of last year, according to a survey of 4,000 shoppers that was conducted by research firm BIGinsight for the National Retail Federation trade group. Spending over the four-day weekend totaled $59.1 billion, up 12.8 percent from 2011.
Michael P. Niemira, chief economist at the International Council of Shopping Centers trade group, said he’s still sticking with his forecast for a 3 percent increase in sales for the holiday season. Originally, Niemira had expected November would be stronger than December, but now he anticipates the trend will be flipped.
Kohl’s revenue at stores open at least a year fell 5.6 percent in November. That was well below the 1.9 percent rise anticipated by analysts surveyed by Thomson Reuters.
Meanwhile, department store chains Macy’s and Nordstrom Inc. reported their first monthly sales drop since late 2009 when the U.S. economy was just coming out of the Great Recession.
Target reported that revenue at stores opened at least a year fell 1 percent, well below the 2.1 percent increase that Wall Street was anticipating.
Target said weak sales early in the month offset stronger sales later on. Still, it said during a pre-recorded conference call that its profitability for the month remained “on plan.”