2008-12-04-Bain-Bain_Retail_Holiday_Newsletter_4_21页_396kb

Summary of US Retail Performance During the 2008 Holiday Season

Core Content

The document outlines the performance of US retailers during the 2008 holiday season, highlighting that while the Thanksgiving weekend showed some positive results, the overall holiday season is expected to be one of the worst on record due to ongoing economic downturns.

Main Points

1. Recession and Economic Conditions

• The US economy officially entered a recession in December 2007.
• The recession has led to macroeconomic deterioration, including a 15-year high in unemployment (6.7% in November 2008) and a significant drop in consumer spending.
• Consumer confidence slightly improved, but this was overshadowed by the broader economic uncertainty.

2. Retail Sales Performance

• Thanksgiving Weekend:
  • Sales were up compared to 2007, with Black Friday seeing a 3% increase to $10.6 billion.
  • Foot traffic dropped by 19.3%, the largest decline on record.
  • Combined growth for the weekend was 1.9%, with Saturday sales down 0.8%.
• November Sales:
  • Same-store sales fell by 2.7%, the lowest in over 35 years.
  • This marks the second consecutive month of decline, with the worst performance since 1969.
  • Excluding Wal-Mart, sales dropped by 7.7%, the sharpest since 1991.
• December Outlook:
  • Sales are expected to remain flat or decline, with no significant rebound anticipated.
  • Online sales growth has slowed significantly, turning negative in November for the first time since 2001.

3. Retailer Performance

• Discount Stores:
  • Led the sales growth, with Wal-Mart and Target being top performers.
  • Sears and Kohl's expanded their discount offerings.
• Luxury Retailers:
  • Experienced significant declines, with Saks down 70% and Nordstrom down 50% in discounts.
  • Luxury sales were driven by deep discounts, which impacted margins.
• Department Stores:
  • Suffered steep same-store sales declines, with Kohl's down 13.3% and Dillard's over 400%.
• Specialty Apparel:
  • Teen-focused brands like American Apparel and Buckle saw growth, while Abercrombie & Fitch and Aeropostale experienced declines.
• Warehouse Clubs:
  • BJ's and Costco had strong performance, with same-store sales up 4.1% and 1.0%, respectively.
  • Costco's EPS increased by 8.0%, while BJ's saw a 37.1% rise.

4. Online Sales Trends

• Cyber Monday:
  • Online sales increased by 15% to $846 million, the second-largest online shopping day on record.
  • However, this was not enough to reverse the long-term decline in online sales.
• E-commerce Growth:
  • November e-commerce sales fell by 2.7%, marking the first negative growth since 2001.
  • The third-quarter e-commerce growth was only 4.6%, lower than previous estimates.
• Future Outlook:
  • ComScore predicts flat growth for December online sales, compared to a 19% increase in 2007.
  • If financial markets worsen, online holiday sales could be even worse.

5. Consumer Behavior

• Shoppers focused on value and practicality, with clothing and accessories being the top purchases.
• There was a shift towards "needs" over "wants" due to economic uncertainty.
• Consumers were drawn to deep discounts, especially on electronics and home goods.

6. Key Charts and Data

• Chart 1: Black Friday sales growth (2006-2008).
• Chart 2: Black Friday and Saturday sales vs. November-December GAFO sales.
• Chart 3: Discount depth and breadth comparison between 2007 and 2008.
• Chart 4: November same-store sales change.
• Chart 5: Quarterly EPS change for 2007-2008.
• Chart 6: Top 10 visited retail websites on Black Friday and Cyber Monday.
• Chart 7: Retail e-commerce growth rates (January-November 2008).
• Chart 8: Quarterly e-commerce sales and growth (2001-2008).
• Chart 9: Top categories purchased during the Thanksgiving weekend.
• Chart 10: Gifts purchased during the Thanksgiving weekend (2006-2008).
• Chart 11: CPI monthly growth.
• Chart 12: US regular gasoline price trends.
• Chart 13: Unemployment and nonfarm payrolls (1980-2008).
• Chart 14: Monthly consumer spending growth (January 2000-October 2008).
• Chart 15: Newsletter schedule and data sources.

Key Information

• The Thanksgiving weekend provided a brief positive note, but it is unlikely to offset the overall poor performance of the holiday season.
• Luxury and women's apparel retailers were among the hardest hit.
• Consumer electronics and home goods saw strong demand, driven by promotions.
• Online sales growth has slowed significantly, with November marking the first negative growth since 2001.
• The document also includes a list of references and press releases from various retailers and economic data sources.