NEW YORK – Thanksgiving week sales lured bargain conscious consumers into stores, two reports suggested on Tuesday, but one robust week is not enough to signal a holiday season boom for ailing retailers, economists said.
Sales in the two days after Thanksgiving are crucial to U.S. retailers, not only as a barometer of holiday sales, but also because it helps them determine the price discounts that are likely to yield maximum revenue.
A bumper holiday shopping season could help rescue the U.S. economy, which is two-thirds driven by consumer spending, from recession.
The latest reports back a trend seen in other retail gauges of the Thanksgiving holiday that showed year-over-year growth of between 2 percent and 3 percent, little more than the rate of inflation in the world's largest economy.
The Bank of Tokyo-Mitsubishi/UBS Warburg retail chain store sales index -- which measures weekly sales up to and including Saturday -- recouped the preceding week's losses, rising 0.9 percent after a 0.5 percent decline in the week ending Nov. 17.
The index is now back to where it stood in late September, but at 393.1 is still well below the 402.1 seen in the week before the devastating Sept. 11 attacks on the United States.
Separately, Instinet Research's Redbook Average grew 2.4 percent in the three weeks to Nov. 24, driven by a pick up in post-Thanksgiving sales, after a 1.5 percent rise in the previous period.
"I think retailers were satisfied with what happened over the weekend, but I don't think that they were particularly ecstatic," said Steven Wood, chief financial economist at FinancialOxygen in Walnut Creek California.
Working against sales was the fact Thanksgiving was earlier than usual this year, so consumers were not quite as pressed to get their holiday shopping done, Wood noted.
BTM's index rose 2.2 percent year-over-year, weaker than the previous week's gain of 2.4 percent, and well below the 3.3 percent year-over-year growth seen the week before Sept. 11. The sales index grew to 393.1 from 389.5 in the previous week.
Compared with last year's Thanksgiving week sales, which analysts said were themselves very disappointing, the Redbook index rose 4.8 percent, following a 1.9 percent year-over-year gain in the preceding week.
'Tis the Season to Be Thrifty
Higher unemployment, the Sept. 11 attacks and military action in Afghanistan have taken a toll on consumer spending in recent weeks and a fall in the Conference Board's consumer confidence index on Tuesday indicated further weakness may lie ahead.
With consumers wary of parting with their cash, discounters ruled the day over the Thanksgiving holiday.
"There seemed to be lots of people in stores, but they were drawn mostly to the bargains," Wood said.
Wal-Mart Stores Inc., the world's largest retailer, reported record single-day sales of $1.25 billion on Friday. But the retailer said that, while more customers were frequenting their stores this year, the value of the average purchase per customer was down.
Despite a preference for bargains by consumers, discount retailer Kmart Corp. on Tuesday reported a wider fiscal third-quarter loss due to lower sales and the cost of overhauling the shipment of goods to its stores.
Analysts said Kmart's prices are not competitive with those of rivals like Wal-Mart Stores Inc. and Target Corp.
Check acceptance company TeleCheck Services Inc. said on Monday that sales at retail stores open at least a year rose 2.3 percent in the three days following Thanksgiving. That figure topped the company's seasonal growth estimate of 2 percent, but fell short of last year's 3.8 percent gain.
Foot traffic at shopping malls on Friday, Saturday and Sunday fell 7.4 percent from 2000, while the number of people shopping in department stores fell 11.7 percent, according to Chicago-based RCT Systems, which tracks such data for retailers.
Traffic for the whole week fell for the 30th straight week, RCT said.
The BTM/UBSW Weekly Chain Store Sales Snapshot is compiled from seven major discount, department and chain stores across the country. They are J.C. Penney Co. Inc., Sears, Target, Kmart, Wal-Mart, Federated Department Stores Inc. and May Department Stores Co.
The Redbook Retail Sales Average is a sales-weighted average of annual growth in same-store sales at discount, department and chain stores that report results on a weekly basis. The index is released weekly by Instinet Research, a division of Instinet, a Reuters-owned electronic brokerage.
Economists at the National Bureau of Economic Research declared on Tuesday that the U.S. economy began to contract in March of this year.