December Retail Sales Disappoint

ISSAQUAH, Wash. — Several retailers last week reported December comparable-store sales that were lower than analysts expected, citing severe weather and in some cases an early shopping season that faded late. Costco Wholesale Corp. here said comparable-store sales in the U.S. were up 3% for the five-week period that ended Jan. 2, excluding gasoline inflation. Total comps for the company, including international

ISSAQUAH, Wash. — Several retailers last week reported December comparable-store sales that were lower than analysts expected, citing severe weather and in some cases an early shopping season that faded late.

Costco Wholesale Corp. [4] here said comparable-store sales in the U.S. were up 3% for the five-week period that ended Jan. 2, excluding gasoline inflation. Total comps for the company, including international sales — which were also impacted by severe weather in Canada and the U.K. — were up 4%, excluding both gas inflation and the impact of foreign currency exchange rates, or 6% otherwise. Analysts expected slightly higher comps — about 6.2%, according to reports.

“We estimate the adverse conditions negatively impacted our reported December comp sales by approximately minus 1%,” Jeff Elliot, assistant vice president, financial planning and investor relations, Costco, said in a conference call last week.

He said comp sales of food and sundries rose “in the mid-single-digit range,” citing strength in deli, cooler, candy and other foods.

“The majority of departments within food and sundries were inflationary for the month,” he added, citing in particular dairy, meat, prepared foods and frozen foods. Overall year-over-year inflation for the food and sundries category was estimated at about 1% to 2% for December.

Minneapolis-based Target Corp. reported December comparable-store sales gains of 0.9% for December, although grocery sales were up.

“December sales were below expectations, as strength in grocery and apparel was offset by softness in electronics, toys and some home categories,” said Gregg Steinhafel, chairman, president and chief executive officer, Target Corp. “Sales in some key gift-giving categories moved earlier into the holiday season, and lower-margin items drove a higher portion of sales than expected.”

Columbus, Ohio-based Retail Forward, part of Kantar Retail, calculated overall retail same-store sales growth of 3.2% in December “in the wake of November's exceptionally strong promotional activity and an ongoing shift toward online shopping.”

The sales-weighted composite for the 31 retailers tracked was weaker than the 5.6% same-store sales gain in November, but slightly better than the 3% gain in December 2009.