Retailers Post Weak Sales As Holidays Loom

Credit Crunch And High Energy Costs Cause Consumers To Keep Tight Reins On Their Spending

(AP)  The outlook for the holiday shopping season grew bleaker Thursday after retailers announced disappointing October sales results due to consumers' ongoing worries about housing and higher energy prices.

The downbeat news came from all sectors including mall-based apparel stores like Limited Brands Inc. and department stores like Macy's Inc. Even upscale Nordstrom Inc. posted a rare sales decline while Wal-Mart Stores Inc., the world's largest retailer, posted sales below expectations despite its aggressive discounting heading into the holidays.

Warehouse club operators including Costco Wholesale Corp. and BJ's Wholesale Club Inc. were among the few standouts, a sign that consumers are searching for lower prices.

"Overall, the sales trend continues to slow," said Ken Perkins, president of RetailMetrics LLC, a research company in Swampscott, Mass. "I think the consumer is certainly feeling the (economic) pressure heading into the holidays."

Milder than normal weather also hurt sales, wiping out consumers' appetite for winter wear.

The International Council of Shopping Centers-UBS tally was up 1.6 percent in October, below the original 2.5 percent forecast, marking the slowest October pace since 1995. The tally is based on same-store sales, or sales at stores open at least a year, considered a key indicator of a retailer's health.

The 1.6 percent pace was below the 2.2 percent gain averaged so far this fiscal year, which for retailers begins in February. Still, Michael P. Niemira, chief economist at ICSC, estimated that mild weather depressed sales results by about 0.75 percentage point.

With Dec. 25 about seven weeks away, the retail industry is struggling with consumers' eroding confidence and a weakening sales trend amid mounting problems in the economy. Throughout the year, shoppers have been faced with higher gas and food bills and depreciating value of their homes. Tighter credit has also become an issue in recent months. And while last week's move by the Federal Reserve to cut a key interest rate by a quarter-point will make it cheaper to borrow money, economists say it may be too late to help boost holiday spending.

Amid such challenges, many stores including Wal-Mart and Toys "R" Us Inc. aim to jump start the season early this year by offering door busters and big discounts starting last weekend in a season that is expected to show the slowest growth since 2002. But shoppers don't seem to be in a hurry to buy.

One big problem is that there seems to be little buzz about must-have items. In the toy business, retailers and manufacturers already bruised by a series of highly publicized recalls this summer suffered another blow Wednesday when millions of units of a toy called Aqua Dots were taken off shelves; scientists found they contain a chemical that converts into a powerful "date rape" drug when ingested.

Wal-Mart posted a 0.4 percent gain in same-store sales, below the 1.1 percent gain expected by analysts polled by Thomson Financial. The results excluded fuel sales. Wal-Mart said sales of Halloween merchandise were solid across all departments, but seasonal categories related to cold weather including apparel and home furnishings were weak.

At the company's Sam's Club warehouse division, same-store sales rose 2.7 percent, excluding fuel. Including fuel, same-store sales rose 4.2 percent.

Wal-Mart forecast that same-store sales growth will be no more than 2 percent in November. Wal-Mart, which kicked off its holiday discounts with price cuts on toys early last month, promised it will continue to be aggressive in its price cutting throughout the season.

Rival Target Corp., which stumbled in September with disappointing results, fared well in October, posting a 4.1 percent gain in same-store sales, above the 2.5 percent forecast.

Costco had a 9 percent gain in same-store sales, well exceeding the 5.7 percent estimate. Still, results at the company, which sells gasoline at its warehouse stores, were inflated by an up tick in gas prices in October, from a year ago. Excluding gas price inflation, sales would have been up 5 percent.

BJ's said food and gasoline sales drove its same-store sales 4.8 percent higher in October. Analysts had expected a 3.1 percent increase

Among department stores, Nordstrom, which reported a weaker-than-expected 3.2 percent same-store sales gain in September, posted a 2.4 percent drop in October. Analysts expected a 1 percent gain.

Saks Inc., which operates Saks Fifth Avenue, posted a 10.6 percent gain in same-store sales, well exceeding the 5.4 percent estimate.

Macy's posted a 1.5 percent decline in same-store sales, worse than the 0.6 percent projection.

J.C. Penney Co. had a 1.8 percent decline in same-store sales in its department store business; analysts expected a 0.6 percent increase.

"Our customers are clearly facing headwinds that are impacting both sentiment and discretionary spending levels, including weak housing market conditions, high energy prices, and uncertainty in the mortgage and credit markets," said Myron E. Ullman, III, chairman and CEO of Penney.

Penney stuck with its third-quarter outlook but reduced its sales expectations for the remainder of the year to reflect the weak spending environment. Fourth-quarter same-store sales are expected to decline in the low single digits.

Limited had a 6 percent drop in same-store sales, worse than the 1.6 percent drop Wall Street expected.

Gap Inc. had an 8 percent decline in same-store sales, worse than the 4.5 percent forecast.

Pacific Sunwear of California Inc.'s 0.8 percent decline in same-store sales was worse than the expected 2.8 percent increase.

[trueprophet]

RON PAUL IS THE TAXPAYER''S BEST FRIEND
If he is elected President, Ron Paul will work to abolish the Federal Reserve System as well as the IRS, returning our country to the Gold Standard. He believes, as I do, that our current Income Tax System is unconstitutional, because it is a direct tax that is not equally apportioned as The Constitution requires. Whenever taxes are raised by the federal government, it should be done as The Constitution does require--in an indirect way, which is equally apportioned. This system would benefit all of us, creating more individual wealth, and allowing us to make more decisions for ourselves about our lives. As President, Ron Paul will also work to abolish the Federal Reserve, a group of private banks, run by unelected officials, which loans our government unbacked money which they are allowed to essentially print out of thin air, making each dollar in your pocket worth less all the time, and increasing our national debt to these banks. Worse still. Most of our debt is owned by China (25%) and Saudi Arabia who finance our runaway military spending overseas. This is a threat to our nation. We need to bring our troops home from overseas, and use the trillions we would save thereby to reduce our debt, and to re-invigorate our currency. We can use this money to ensure that Social Security and other essential programs will still be solvent in the future. Vote for Ron Paul. He''s written entire books on the topic of sound economics. ronpaullibrary.org

[trueprophet]

RON PAUL TAKES ON FEDERAL RESERVE CHAIRMAN
Federal Reserve Chairman Ben Bernanke appeared before the Congressional Joint Economic Committee Chairman, Congressman Ron Paul on November 8th, and had to face some tough criticism. Paul accused the Federal Reserve of "robbery," telling Bernanke, "There''s a dollar crisis out there and people''s money is being stolen," Paul said. "People who have saved, they''re being robbed. I mean, if you have a devaluation of the dollar at 10 percent, people have been robbed of 10 percent." Federal Reserve Chairman Ben Bernanke attempted to dispel that notion by explaining, "If somebody has their wealth in dollars and they''re going to buy consumer goods in dollars, then the only effect it has on their buying power is that it makes imported goods more expensive." Paul disagreed, reminding Bernanke, "Yeah, but not if you''re elderly and you have your wealth in CDs. Their cost of living is going-up no matter what your CPI says," adding finally, "Their cost of living is going up, and they''re hurting. And that''s why the people of this country are very upset."

[jetranger7]

Won''t be long, I say about another 6 to 15 months, and even the upper middle class will begin to lose their homes to Foreclosure,more jobs will go overseas, Plants shut down and lay off all workers, Gas & diesel will hit 6 to 7 dollars a gallon, has anybody seen the price of a gallon of MILK lately ?? The Pre-Planned Economic Collapse is Now here, it will affect others more quickly, and some eventually, but all will suffer great tremendous losses, from their homes & Retirement and Special saving accounts, to their Cars &SUVs they still owe money on, and can''t pay for, I''m talking about middle and upper management too,and all US Based Workers in all fields of employment ! Then they''ll turn around and almost give your homes to the 1st Illegals who can cross the border, and let the Chinese hold your mortage to your homes and cars, and you''ll be living in FEMA Detention Centers used for slave labor, for whatever purpose they see fit, Millions of you !! Its coming, you just have to see it and wake up to the reality of it ! or, do something about it, "REVOLUTION" ! WWW.INFOWARS.COM

[ianlou]

Wondering why people are not buying as much as they did after the systematic destruction of most of America''s domestic manufacturing jobs is like pissing up river and wondering why the water tastes funny.

[nskduke1]

For Chistmas a want a lead free toy.Like that will ever happen.
This holiday season like before you act. If the toy comes from China, then it must contain lead. The best way to stay away from toys that contain lead, is don''t shop at Wal-Mart.

[trueprophet]

Noticed prices are higher lately? So have I. Inflation, which increases the price of everything you buy, be it a dozen eggs at the store, or the price you pay for gas at the pump, is caused when The Federal Reserve, a group of private banks run by unelected officials, who are not accountable to we the people, lowers the interest rate, notwithstanding the fact that the Dollar has been undergoing a major devaluation overseas, rather than increasing the interest rate like it should have done. That''s Economics 101, folks. Everything costs more in U.S. Dollars, because the Dollar is worth less. Because the Fed is allowed to print unbacked money out of thin air, and then loan it to the our government, which is then saddled with an interest obligation to pay it back, our money is becoming worth less and less each day, and our National debt to the Fed is approaching 10 trillion dollars. It gets worse. Most of our debt is owned by China (25%) and Saudi Arabia who buy our Treasury Bonds, which finances our runaway military spending overseas. This is a threat to our nation, folks. We need to stop this madness. We need to bring our troops home from overseas, and use the trillions we would then save thereby to reduce our debt, and to re-invigorate our currency. We can then use this money to ensure that Social Security and other essential programs will still be solvent in ten years. Vote for Ron Paul. He''s written entire books on the topic of sound economics. ronpaullibrary.org

[bm6005]

Tighten your seatbelts folks. Offshoring finally comes home to roost. When nobody''s working, won''t nobody be buying. America, on the fast track to third world country status. Boosh had better retire in South America because if he''s here there''ll be a line in Crawford Texas...... In fact we can thank almost all of our gov''t for selling their employers (us) down the drain. I''ll be here to remind you!

[terrapin78]

This is Bu$hes Holiday Gift to all Americans!

A ******* economy!

[trillion1]

This holiday season people will have to chose between food, home heating or gifts.