Major retailers including Costco, Gap and Nordstrom last week reported better-than-expected revenue in December. That comes as a relief for stores, which can make as much as 40 percent of their annual revenue in the last two months of the year.
“We sold through a lot of merchandise in December,” said Frankie Ford, store manager at Maurices in Mount Berry Square mall.
“I think the first week was a little slow but from then on it got pretty busy.”
Americans spent cautiously early in the season because of the damage after Superstorm Sandy. Then they held back because of the possibility of the U.S. economy falling off the “fiscal cliff,” which would’ve triggered massive budget cuts and tax increases that would amount to less money in their pockets. But shoppers spent more freely in the final shopping days of the year.
Ford said a reason that she heard many customers refer to was that they were waiting on their paychecks for the month.
Also, Floyd County Schools were not let out for the holidays until Dec. 21, later than usual according to Ford.
“Once that happened we had a lot of people coming in,” She said.
Paula Conaway, owner of Paula’s Boutique on Broad Street, was busy taking inventory during the first week of January as she does every year and was planning to reopen Tuesday.
She said that she did notice customers begin their Christmas shopping later than usual but special sales on certain sections throughout December and a 50-percent off sale for the entire store after Christmas helped out.
“I think we did real good,” Conaway said. “We had big sales to clean out some of our stock and we were covered up for the most part.”
As far as comparing this past holiday season with the one from 2011, Conaway seems optimistic.
“I think we’ll see an increase in sales when we compare the two,” she said. “I believe we had a lot more traffic, including a lot of people who came in from out of state.”
One local store had the benefit of a recent remodel to help with their holiday sales.
Sam’s Club, located at 2550 Redmond Circle, added a bakery, café and rottiserie deli to the store near the beginning of September, according to general manager Tarah Pounders.
“We had a lot more of a variety of things that sold well during the holiday season,” Pounders said. “It really boosted our sales and foot traffic.”
With the extra week of shopping in December, Pounders said that they felt the impact with a slow start to the month but it picked up at the end.
“We actually had a great December this year and I think the addition of our fresh department contributed to that,” she said.
Twenty retailers reported that revenue at stores open at least a year — an indicator of a store’s health — rose an average of 4.5 percent in December compared with the same month a year ago, according to the International Council of Shopping Centers.
That’s on the high end of the expected range of 4 percent to 4.5 percent. Only a small group of stores that represent about 13 percent of the $2.4 trillion U.S. retail industry report monthly revenue, but the data offers a snapshot of consumer spending.
“I wouldn’t be doing cartwheels that it was a particularly great or strong holiday season, but it could have been worse given the headwinds,” said Ken Perkins, president of RetailMetrics, a research firm. “The government and Mother Nature were not as cooperative as retailers would have liked. But it was definitely not as bad as feared.”
December’s results provide a brighter picture than reports last month that proclaimed that the holiday shopping season was shaping up to be the worst since 2008 when the U.S. was in a deep recession.
To be sure, the season had multiple fits and starts, with healthy spending during certain periods followed by stretches of tepid sales. Overall, revenue for the combined months of November and December rose 3.1 percent, slightly above the 3-percent rise that the ICSC had predicted.
Sales were weak at the beginning of November in the wake of Superstorm Sandy on the Northeast and the U.S. presidential campaign, followed by a surge later in the month during the four-day Thanksgiving weekend. Spending fell off after that until a rush right before and after Christmas when some stores began offering bigger discounts.
“That last-minute shopping, coupled with post-Christmas bargain hunting and early gift-card redemption, helped propel sales at the end of the month,” said Michael P. Niemira, ICSC’s chief economist.
Kelly Tenedini, 35, decided to pick up some “filler” gifts for her mom and her sister on the Sunday before Christmas at the Target in the Edgewood Retail District in Atlanta. Tenedini, who spent about $400 during the season, bought a sweater for her mom and gloves for her mother and sister that day.
Tenedini, who works in marketing, said the biggest deal she found was for herself: $50 off a pot and pan set on Target.com.
Manuel Gonzalez, 52, fromthe Manhattan borough of New York City, spent about $150 on the Saturday before Christmas when he went to The Garden State Plaza in Paramus, N.J. He scooped up bargains, including 75-percent off Sketcher sneakers at Macy’s.
For the season, he was planning to spend about $400 to $500 for gifts for his three boys, ages 5, 8 and 22 — the same amount he spent a year ago.
Gonzales, who works at a bank, said he’s glad he waited until later in the season to shop: “I am budgeting.”
While the last-minute promotions may have drawn shoppers like Tenedini and Gonzalez, they also ate into stores’ profits.
For instance, Kohl’s said its December revenue at stores open at least a year increased 3.4 percent, beating Wall Street predictions. But the retailer said that the growth came from heavy discounts, and it cut its profit outlook for the current quarter and full year.
“Sales came late in the holiday shopping season and, as a result, were at deeper discounts than planned,” said CEO Kevin Mansell. “We are taking the necessary markdowns in the fourth quarter to manage our inventory as we transition into the Spring season.”
Staff writer Jeremy Stewart contributed to this report.