1/21/2011 8:50:56 AM #

December, the "home stretch" of the holiday shopping season, saw some dramatic improvements at individual retailers, including double-digit same-store sales increases at the two companies heading the Top 5 list, Abercrombie & Fitch and Saks.

But where there are winners there are always losers, including one retailer that achieved the dubious distinction of a double-digit same-store decrease: American Eagle Outfitters, with same-store sales 11% below those of December 2009. The good news is that the remaining retailers on the Bottom 5 list were able to limit their decreases to 5% or less.

Overall, retail spending grew in December 2010, but not at November's strong pace, when same-store dollar volume growth hit 7.9% (excluding gasoline sales). According to First Data SpendTrend, which tracks card-based payments, December's same-store sales growth was 5.9%, excluding gasoline sales. Some possible explanations for the December slowdown include retailers engaging in heavy promotional activity to entice shoppers into stores, and harsh weather in the Western U.S. just before Christmas and in the East just after.

Sales for the entire holiday season were quite strong, climbing 5.5% to $583.4 billion, a total larger than the pre-recession year of 2007. E-commerce made a particularly strong showing this season, increasing 13% to achieve a total of nearly $13 billion.

Following are the big Winners and Losers for December:

Top 5 Retailers

Based on same-store sales for December 2010 compared to December 2009, the Top 5 Retailers are:

Abercrombie & Fitch                +15.0%
Saks                                         +11.8%
Nordstrom                               +8.4%
Dillard's                                    +7.0%
Buckle                                      +6.1%

Heavy discounting seemed to be a winning strategy for Top 5 leader Abercrombie & Fitch, which used promotional pricing to take market share from other teen and young adult-oriented retailers such as Aeropostale and American Eagle Outfitters.

Strong performances at Saks and Nordstrom point to a resurgence in luxury retailing, according to J. Philip Leichliter, president of J. Philip Group, which analyzes retail sales patterns. However, while he sees "guarded optimism" in these and other pockets of retailing, Leichliter warns that "the consumer continues to be cautious, and retailers must give them a REASON to come into their stores."

Which leads us to the Bottom 5 Retailers:

American Eagle Outfitters         -11.0%
Aeropostale                              -5.0%
Gap Inc.                                   -3.0%
Wet Seal                                  -2.1%
Stein Mart                                -1.9%

As noted above, it's likely the improvements at youth-oriented retailer Abercrombie & Fitch came at the expense of other retailers serving this market, including American Eagle and Aeropostale. For Gap, its name brand was the laggard, with same-store sales down 8% for December as compared to 1% and 2% increases for Gap's Banana Republic and Old Navy brands respectively.

Stein Mart, which offers men's and ladies sportswear as well as accessories and home textiles, was negatively affected by adverse weather in the Midwest, Northeast and parts of the Southeast. Sales at Stein Mart stores in Florida and California were better than the company's overall trend.

For related content see: Top 5 and Bottom 5 Retailers in August

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