You know that bad news is coming when even the industry groups (like Shoppertrak and ICSC) report that traffic/sales results are falling below their expectations. Today, Shoppertrak really tried to push a merry headline on its report that showed that holiday foot traffic slipped 2.7 percent versus 2006 and fell more dramatically than forecast (down 4.7 percent in December.)
At the same time, Shoppertrak reports that the holiday did exceeded low expectations that December sales rose 3.5 percent (versus 2006) and November's sales increased 6 percent (versus 2006.) That said, beating low expectations isn't the same as posting robust results. Something that the stores did not do this season.
Yesterday, we heard from the International Council of Shopping Centers that retail sales growth probably slowed to 1 percent last month--what would mean the worst holiday season in five years. The ICSC said combined November and December sales may have increased at a rate below its 2.5 percent forecast.
When we look straight to the malls and talk to consumers themselves, the outlook is even more gloomy. Polling by America's Research Group doesn't give investors much hope for shaking off a recession. According to ARG, the week between Christmas and New Years saw the lowest shopping level in the past six years.
Of those consumers who did shop last week, 70.1 percent said they had bought only on-sale items. This is the highest number in three years. While that buying of sale items may help sales results, it certainly puts pressures on margins. Earnings season is going to be an interesting one for retailers.
Here's the potential good news. While the headlines won't be strong tomorrow, the reaction to retail sales data may surprise some. It is VERY hard to find an optimist in the retail sector right now BUT we could see a short-term pop in retail stocks. Will red sales results bring green arrow to shares tomorrow?
Questions? Comments? retaildetail@cnbc.com