Retail's Holiday Story Faces an Unhappy Ending

Retail sales continued to disappoint last week, despite being the last full week before Christmas.

Same-store sales at retailers surveyed by Instinet Research grew by just 0.3% over the same week last year, the group said in its weekly Redbook Average report on Tuesday. That was far below what the retailers were expecting and the smallest gain this month.

Same-store sales compare results at outlets open for more than one year.

In their survey of comparable-store sales, also released on Tuesday, UBS Warburg and Bank of Tokyo-Mitsubishi reported growth last week of 0.1% compared with the previous week and 1.7% over the same week last year. Like the Redbook report, the UBS Warburg survey said that sales were coming in below retailers' plan.

"Retailers are indicating that the finish will have to be considerably stronger than originally anticipated in order to bring them in on target. We expect the final two weeks to lift December's average from its current level, but the month is likely to remain [and end] below plan," Instinet Research said in its report.

The surveys provide further evidence of what has been a dismal holiday season for retailers. Last month, many retailers reported same-store sales that were at the low end or below their projections.

That weakness has carried over to December. On Monday, ShopperTrak RCT released a report that said sales of general merchandise, apparel, furniture and specialty stores this month are down 5.5% compared with last December.

Meanwhile, individual retailers are seeing the effects of soft consumer spending. Comparable-store sales at retail behemoth Wal-Mart WMT are coming in at the low end of the company's 3% to 5% projections companywide, with sales at its discount stores and Sam's Club divisions coming in below plan. Target TGT and Federated Department Stores FD reported Monday that their same-store sales for the holiday period are coming in below their expectations.