By Lynn Koller
Reprinted from: Florida Real Estate Journal - February 1, 2004
Holiday sales for 2003 did not bring retailers to tears -- of joy or misery -- and projections for 2004 may produce a similar reaction. Retail sales for the 2003 holiday season, excluding auto sales, started slowly and then peaked immediately before and in the week after Dec. 25, compared with previous years when shoppers bought more goods earlier in the season.
Overall, December industry sales grew by 4.2% based on the International Council of Shopping Centers' tally of 77 chain stores that represented $91.4 billion compared with $87.7 billion for the comparable five-week fiscal month of December 2002. Wholesale clubs and drug stores fared well over the holiday season. Wholesale club comparable-store sales rose 8.6% and drug store sales 8.1% in December compared with December 2002.
According to New York-based ICSC, discounters' sales increased 4.1% in December over last year, and apparel-specialty stores sales rose by 2.4%. Department stores saw a 1.2% increase, which marked the strongest pace since September. Footwear stores posted a 0.6% increase in December comparable-store sales, after a sharp decline in November, while furniture stores sales dipped 2.2% in December.
While discounters may have hoped for a bigger share of consumers' holiday spending money, Rick McAllister, president and chief officer of the Tallahassee-based Florida Retail Federation, says they have no reason to complain.
"Discount stores say, ŒWe didn't do all that great this year,' but that's relative," says McAllister. "For example, Wal-Mart increased about four or five percent, but five percent of a gazillion is a lot." According to ICSC, Wal-Mart sales increased 4.3% in December over the same month last year.
Factors that may have lowered sales figures include inclement weather in some areas of the country and a surge in gift card purchases. Gift cards were very popular and are not necessarily tabulated into sales figures until they are redeemed, meaning that that spending may be reflected in early 2004.
"Despite the weather-related delays and consumer procrastination, the last minute surge in spending gave retailers their strongest holiday season since 1999," said Michael Niemira, ICSC's chief economist and director of research.
While some specific segments and chains may have been disappointed, the sun shines over Florida's retail industry. Many factors that affect other states' economics leave Florida high and dry. McAllister points out that in addition to the impossibility of incapacitating snow storms, Florida has no specific industries ‹ aside from tourism ‹ on which it relies, compared with other states that depend heavily on the welfare of specific industries for a healthy economy.
"Florida is by and large untouched by many things that occur," McAllister says. "The biggest negative we have is from the national media telling us how bad things are."
For 2004, ICSC predicts that comparable-store sales will grow by 4%, following a 3.2% increase in 2003. It also anticipates that the performance will be more balanced across the industry, compared with 2003. McAllister predicts that 2004 will be a good year for Florida retailers, barring some sort of horrific event.
"We've proved that we're pretty resilient," McAllister says.
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