NEW YORK (AP) — Retailers reported strong sales gains in November, boosted by a discount-fueled buying binge for the start of the holiday shopping season last weekend. Now, the challenge is to keep shoppers spending throughout the most important selling period of the year.
Several retailers including Macy’s Inc., Costco Wholesale Corp., Limited Brands Inc. and teen retailer Buckle Inc. reported sales gains Thursday that beat Wall Street estimates.
The reports are encouraging news for retailers during the all-important holiday shopping season when they can make up to 40 percent of their revenue. To draw people into stores during the kickoff to the season last weekend, many retailers discounted heavily and opened stores at midnight on Thanksgiving evening.
“Retailers pulled out all the stops over Black Friday, which fueled record holiday weekend sales and drove solid November growth,” said Ken Perkins, president of Retail Metrics, a research firm. “That sets up well for the remainder of the season. But the next two weeks are critical. You don’t want to lose the momentum.”
That retailers had a healthy start to the holiday season despite a weak economy is encouraging: Americans spent $52.4 billion over the four-day Thanksgiving Day weekend, the highest total ever recorded during the traditional start to the holiday shopping season. But a strong finish to the season will be crucial, and analysts agree that retailers will have to offer ever bigger discounts in order to keep shoppers coming back.
Thursday’s figures, based on revenue at stores opened at least a year, are considered a key indicator of a retailer’s health. They also give a glimpse into how they’re faring so far during the holiday season.
Discount-club operator Costco’s revenue at stores open at least a year increased 9 percent in November, thanks to strong performances in the U.S. and overseas. The figure easily beat Wall Street’s expectations. Analysts polled by Thomson Reuters predicted the metric would climb 6.5 percent.
Department-store chain Macy’s posted a 4.8 percent gain, above the 3.9 percent increase that Wall Street analysts had expected.
“A strong Black Friday punctuated our very positive sales performance throughout November at both Macy’s and Bloomingdale’s,” said Terry J. Lundgren, Macy’s chairman, president and chief executive in a statement.
But not every retailer had a strong showing in November. Target had a disappointing 1.8 percent increase, below the 2.8 percent gain that Wall Street analysts had expected. The figure is being compared with a 5.5 percent gain in November 2010.
“November sales were near the low end of our expectations for the month as we compared against very strong performance last year,” said Gregg Steinhafel, chairman, president and chief executive in a statement.