Sales at stores open at least one year rose 5.3 per cent during the week ended Saturday compared with the same period a year ago. That report comes from the International Council of Shopping Centers and Goldman Sachs Weekly Chain Store Sales Index, which estimates sales for 24 major stores like Target Corp. and Costco Wholesale Corp.
Revenue at stores open at least a year rose 1.2 per cent for the week ended Saturday compared with the previous week, according to the index.
The metric is considered a key gauge of a retailer's health because it excludes results from stores recently opened or closed.
As a result of the latest surge, the group increased its December sales growth estimate to a range of 4 per cent to 4.5 per cent. Previously the council expected December sales to rise by 3.5 per cent to 4 per cent.
Major retailers are set to release their final figures for the month on Thursday, but the big concern is how aggressive discounting and other incentives like earlier store openings and free shipping affected merchants' profits. Stores are expected to offer comments regarding their outlook for fourth-quarter results, which will be released next month.
For the official start of the holiday shopping season, stores opened as early as Thanksgiving Day, plying shoppers with discounts, resulting in record sales. But shoppers took a longer-than-usual break after that, and some stores had to step up discounting beyond what was planned in the final days before Christmas to attract shoppers, according to David Bassuk, managing director of retail at the consulting firm AlixPartners. Post-Christmas bargains were even better. Express stores, for example, promoted an "End of Season" sale, with merchandise prices reduced by up to 70 per cent.
"The concern going into the season was that the profitability wouldn't be as high as a year ago," said Mike Niemira, chief economist at the International Council of Shopping Centers. "I suspect adjustments will have to be made." That could range from closing stores in unprofitable locations to changing marketing strategy.
For the November and December period combined, revenue at stores open at least a year is now expected to rise by 3.8 per cent, up from the original 3.5 per cent, says Niemira.
The ICSC expects total retail sales for the combined November and December period to rise 3.8 per cent, up from an earlier forecast for 3.0 per cent growth. Total retail sales exclude data from gas, automotive dealers, gas stations and restaurants and conform to data in the government retail sales report. The Commerce Department releases December sales data on Jan. 12.