Department Stores Dominate Pre-Christmas Shopping

Department stores have taken the early leg on holiday shopping over specialty retailers and even big-box discounters.

According to the International Council of Shopping Centers, November was a lackluster month for retailers — but what business there was was dominated by the department stores.

This morning’s New York Times reported, “As the nation’s merchants began crunching numbers from November, the crucial first leg of the holiday shopping season, one pattern stood out: consumers flocked into department stores but largely shopped right past specialty clothing retailers.”

Same-store sales at department stores rose 4.6 percent in the month, according to the ICSC, while those of apparel chains rose 0.2 percent. “Increasingly,” said The Times, “it looks like department stores will dominate the holidays.”

Overall, said ICSC chief economist Michael Ni, retail sales rose a respectable if lackluster 2.1 percent, the slowest one-month growth since March.

The Times said analysts offered two explanations for the so-so November results. Pockets of warm weather dampened purchases of winter clothing. And same-store sales comparisons were challenging versus a year ago, when retailing benefited from post-Hurricane Katrina spending.

Sales rose 8.5 percent at Federated Department Stores Inc. (Cincinnati) and 5.4 percent at Nordstrom Inc. (Seattle), though Federated ceo Terry Lundgren, said he was “disappointed in the performance of former May Co. locations” acquired last year in a merger. It was suspected that fewer discounts at the now-Macy’s stores may have turned off shoppers.

However, Federated raised its estimates for December sales growth, predicting an increase of 5 to 8 percent, up from 3 to 5 percent.

Sales fell for major clothing chains at the mall in November, though mall traffic reportedly rose 6 percent the day after Thanksgiving. Even Abercrombie & Fitch (New Albany, Ohio), whose monthly same-store sales have consistently been in double digits, said sales fell 3 percent. Jeans sold poorly for both men and women, the company said.

That pattern could hurt chains like Gap, Ann Taylor Stores and Abercrombie & Fitch, and could lead to deeper discounts as Christmas gets nearer.