With Christmas fast approaching, holiday sales appear to be picking up -- but it may not be enough to rescue the season for retailers. In a study released on Monday, ShopperTrak RCT said that retail sales jumped last week after being depressed by the previous week's cold front. But sales for the month to date are still considerably weaker than 2001's and are projected to fall 5.4% from last year, ShopperTrak reported. Meanwhile, weekly same-store revenue reports from Wal-Mart ( WMT) and Federated ( FD) indicated that retailers were still struggling to meet their modest sales projections. "Certainly, sales are not generally exceeding expectations," said Michael Niemira, vice president of Bank of Tokyo-Mitsubishi and lead consultant on ShopperTrak's retail report. "It's not been a strong season, but it might finish on a stronger note." The holiday shopping season got off to a
disappointing start last month. Although retail sales rose a surprising 0.4% in November, according to the U.S. Census Bureau, traditional holiday shopping destinations, such as department, apparel and sporting goods stores, posted sales declines for the month. Individually, companies such as Target ( TGT), Sears ( S), American Eagle Outfitters ( AEOS) and Ann Taylor ( ANN) all reported same-store sales declines for the month. Same-store sales figures compare revenue at outlets open for more than one year. Many retailers blamed their poor November results in part on this year's late Thanksgiving. Black Friday, the day after Thanksgiving that marks the traditional start of the holiday shopping madness, came one week later than normal this year. Some also blamed winter storms that blanketed the Midwest and Atlantic coast for a poor showing in the first week of December. Retail sales appeared to turn around last week, with sales approaching $30 billion, according to ShopperTrak. Sales on Saturday hit $6.3 billion, the second-largest shopping day of the season so far after Black Friday.
But the sales surge may be too little too late for many retailers. That overall sales softness appears to be showing up in retailers' weekly sales reports for December. Retail behemoth
Wal-Mart , for instance, reported on Monday that while sales of its seasonal items picked up last week, its same-store sales growth continues to be at the low end of its projected 3% to 5% rate. Meanwhile, Federated Department Stores, which operates the Macy's and Bloomingdale's chains, said it was difficult to determine how well it will do in December, but that it continues to expect to post a same-store sales decline of somewhere around 2.5%. Retail analysts have blamed the slow sales on the continued economic malaise as well as concerns about a possible war on Iraq, which is depressing business investment and jobs growth. Niemira fingered two other possible culprits: online sales that are taking a greater share of consumers' holiday spending, and lower costs of products, which retailers are passing on to consumers in the form of promotions and discounts. "There's lots of different factors, some industry-oriented, some macro. They're all coming together to give the impression of a more sluggish season this year," Niemira said. As Niemira indicated, however, online retail sales have been anything but sluggish this holiday season. Excluding online auction and travel sales, e-commerce sales between Nov. 1 and last Friday topped $7.1 billion, up 23% from the same period last year, according to ComScore Networks. For the fourth quarter as a whole, online sales are up 24%, according to ComScore. And even some traditional retailers appear to be doing well. J.C. Penney ( JCP), for instance, said Monday that its same-store sales for last week were on target for its projected low-single-digit increase. For the month as a whole, J.C. Penney said its sales were ahead of its expectations.