TBO.com - TBO is Tampa Bay Online

Reduced Prices Likely To Cut Rise In October's Sales

ADVERTISEMENT

Bloomberg News

Published: October 24, 2007

Retail sales in October may rise more slowly than previously forecast as stores continue offering discounts before the holiday shopping period to attract shoppers facing higher costs.

Sales at stores open at least a year may increase 2 percent, down from an estimate of 2.5 percent last week, the International Council of Shopping Centers and UBS Securities LLC said Tuesday.

Retailers reduced prices on more items to lure consumers facing higher gasoline and food prices as well as the worst housing slump in 16 years. Target lowered its October sales forecast. Wal-Mart Stores cut prices on 15,000 items for the holidays.

'Customers have become too conditioned to buy on sale due to the excessive promotions run throughout the third quarter,' said Ann Poole, an analyst at Nollenberger Capital Partners.

Sales for last week increased 2.2 percent compared with a year earlier, the ICSC and UBS survey showed. So-called same-store sales are considered a key measurement of a retailer's performance because it excludes locations that have recently opened or closed.

The Johnson Redbook Index, another measure of retail sales, rose 2.1 percent last week from a year earlier. The index measures same-store sales at general-merchandise retailers representing about 9,000 locations.
ICSC and UBS look at a representative sample of about 50 retail chains.
Target forecast comparable sales to increase 2 percent to 4 percent for the four weeks through Nov. 3, down from an initial projection of 3 percent to 5 percent.

Sales in November and December may increase 2.5 percent, which would be the smallest since 2004, ICSC forecast.

'High energy prices have been and will continue to be a drag on discretionary purchasing power,' said Michael Niemira, chief economist at ICSC.

The average price for regular gasoline was $2.82 a gallon, up 28 percent from $2.21 a gallon a year ago, according to AAA.

The National Retail Federation and TNS Retail Forward anticipate the smallest holiday sales gain in five years as consumers cope with higher prices.

Wal-Mart fell $1.32, or 2.9 percent, to $43.93 in New York Stock Exchange composite trading. Target declined 19 cents, to $61.36.

The Standard & Poor's Retailing Index of 30 companies declined less than 1 percent, after slipping 6.7 percent last week.

Share this:

Loading Comments...

Email Print

ADVERTISEMENT