We heard a lot back in late November about how Black Friday had been a great success and that retailers were quietly optimistic about the Christmas shopping season. As it turned out, a lot of big retailers ended up having down years:
New Christmas-season retail sales reports show that the period was far less robust than many retailers had expected.
The numbers for some two dozen merchants came in relatively weak, falling below the returns of 2010.
Target Corp., Gap Inc., Kohl's Corp. and J.C. Penney Co. all fell short of their own sales targets and in some cases slashed their profit forecasts, reflecting slow traffic in the middle of the month and heavy discounting to clear inventories.
The results show that middle-class consumers remain cautious in the face of a weak jobs market and a still-tepid economic recovery. And while they did show bursts of willingness to spend during the holiday season, the largess wasn't spread around evenly.
Among companies targeting those consumers, Macy's Inc. was a clear winner, beating expectations for the month's sales, raising its dividend and increasing its earnings forecast for the year. The company was helped as well by its Bloomingdale's division as luxury chains, including Saks Inc. and NordstromInc., posted strong sales gains.
"Even though consumers are willing to spend, they will only spend when there is huge discounting," said David Bassuk, head of the retail practice at AlixPartners. "A number of retailers couldn't bring in enough dollars in that environment."
It goes without saying that the strong Black Friday numbers were shouted from the rooftops, while the more sobering numbers have received, ahem, more muted coverage.
This isn't meant to "talk down the economy." (hey, I use the powerful Free Will soapbox judiciously, unlike Ben Bernanke, et al.) I want the US to do well, even if it gives Obama the chance to strut around like he's some kind of captain of industry. Maybe people just bought more stuff on-line this year, although information about, say, Amazon's sales results are oddly difficult to come by. But, the facts are that the US is still in a slump from which it is trying to awake.