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Some retailers report sluggish sales in December


december shopping

MARK BLINCH/REUTERS A man walks by merchandise with for sale signs at a shopping mall during the Christmas shopping season in Toronto, December 7, 2012. REUTERS/Mark Blinch

If early reports are any indicator, retail sales in Canada were weak in December, perhaps suffering as a result of aggressive Black Friday promotions in November, according to retail experts.

The Bay on Thursday posted same-store sales growth of 6.7 per cent for the nine weeks ending Dec. 29, lower than the 9 per cent previously reported for the month of November alone, according to Keith Howlett, retail analyst for Desjardins Research.

Reitmans Canada Ltd. posted a same-store-sales decline in December of 3.4 per cent, compared with a smaller decline of 1.2 per cent in November. Sales at La Senza fell by 9 per cent in December.

TJX Canada, which includes Winners, HomeSense and Marshalls, posted same-store sale increases of 4 per cent. Costco Canada meanwhile, was cited as one of the best performing international markets by the U.S.–based discount warehouse retailer.

The international segment at Costco posted a 6 per cent same-store sales increase, after factoring out inflation in gas prices and currency exchange benefits.

“We had relatively modest expectations for holiday results in Canada, given the weak sales momentum of most retailers exiting 3Q and the late arrival of winter weather in the key population centres of Toronto and Montreal. Winter outerwear, apparel and footwear, as well as seasonal products such as snow blowers, are important components in the achievement of a healthy overall December sales result,” Howlett wrote in a note to investors.

Marketing analyst Len Kubas of KubasPrimedia said the Bay didn’t fare badly, considering what consumers were facing in December: a housing slowdown in Canada and concerns that the fiscal cliff in the U.S. would trigger more economic turmoil.

He said retailers like the Bay are also facing increasing competition from Canadian online competitors including BeyondTheRack.com, a Montreal-based fashion retailing juggernaut that hopes to post $ 200-million in revenue in 2013, and ThePeacockParade.com.

Maureen Atkinson, retail consultant with the J.C. Williams Group, said reduced sales in December compared to November suggest that Black Friday sales may have eaten into the holiday market.

November 2012 was the first year Canadian retailers heavily promoted Black Friday sales, which have become a tradition in the U.S., falling on the day after U.S. Thanksgiving.

Atkinson said the same-store sales increases at the Bay seem pretty good, all things considered.

“I don’t think there are too many department stores around the world growing at that rate,” she said.

She said the Bay has been driving customers to buy using full-page ads in newspapers every day leading up to Christmas, promoting deeply discounted merchandise.

They really did have some amazing buys. I don’t know who actually took the margin hit, that’s the question. The reality is, that what it takes to move people to buy.”

thestar.com – Business