It's not how you begin the race; it's how you finish that counts.
That worked to the benefit of the nation's retailers last year, which got help from last-minute spending by consumers.
Major U.S. retailers yesterday released sales data showing that December results helped them recover from a stumbling start to the holiday season.
"Holiday sales came through in a big way late in the season," said Michael Niemira, an economist with ShopperTrak. "Now it remains to be seen whether sales in the coming months fall off a bit given low remaining clearance inventories for many retailers."
The reports followed the Tuesday release of data by the International Council of Shopping Centers showing that chain-store sales for the week ended Jan. 3 were up 5.6 percent from the same week a year ago.
This translates into industry comparable-store sales growth of about 4 percent to 4.5 percent on a year-over-year basis for December, Niemira said.
But the news wasn't good for every company.
Russell Jones, president of Decisive Retail, an industry consultant based in Richmond, Va., said performance in the retail sector was uneven.
"When I looked at who the winners and losers were, I thought it had less to do with the affluence of the customers and more to do with how well [the stores] understood their customers."
He cited Best Buy and Nordstrom as two examples of chains that are attracting buyers.
Best Buy announced a 9.3-percent increase in December sales for stores open at least 14 months, after previously saying it expected a gain of 6 percent to 8 percent. In the fiscal month ended Jan. 3, Best Buy reported total December sales rising 19 percent, to $4.64 billion, up from $3.89 billion from the same period a year earlier.
Nordstrom said same-store sales were up 9.1 percent and total sales increased 12.2 percent last month.
Jones said Nordstrom's resurgence, while boosted by an upturn in the economy, is due more to changes at the top of the company.
"I'm a firm believer that naming a Nordstrom was the key to getting [the chain] back on track," Jones said.
The Seattle, Wash.-based chain lost its way on the road to expansion across the United States, he said. Eventually, a fourth-generation family member stepped in to replace the company's first chief executive from outside the clan.
"For probably two years they did things with their merchandise that they couldn't do," Jones said. "They couldn't be a fashion leader."
Other department stores, although generating mostly positive numbers, lagged behind Nordstrom.
J.C.Penney Co. benefited from late holiday shopping as same-store sales for the Plano, Texas, retailer rose 4.3 percent. Total sales were up 1.8 percent to $4.74 billion.
May Co., the owner of Lord & Taylor and Filene's, yesterday said December same-store sales rose 1.1 percent. Total sales for the five weeks ended Jan. 3 rose 2.3 percent to $2.52 billion from $2.46 billion a year ago. Analysts had predicted a 1.8-percent decline in sales.
Federated Department Stores Inc., the Cincinnati-based operator of Macy's and Bloomingdale's, reported same-store sales rose just 1.2 percent, and total sales inched up 0.4 percent to $2.78 billion.
At Sears, Roebuck and Co., executives said revenues at comparable stores fell 0.8 percent, while total revenues fell 0.6 percent to $3.92 billion.
Some department stores will continue to struggle as they search for merchandising formulas that resonate with consumers, analysts said.
"One of the great changes in department stores is that people used to shop the same stores," Jones said. "There's no longer that connection with consumers."
That connection between mid-market department stores and consumers began fraying with the rise of discounters such as Wal-Mart and its cheap-chic rival, Target.
But even the mighty stumble now and again.
Wal-Mart, the nation's largest retailer, made investors shudder last month when executives at the Bentonville, Ark., company said they expected same-store sales to hover near 3 percent. Yesterday, the company said it posted a 4.3-percent gain from the holiday season last year. Total sales climbed 11 percent to $33.66 billion.
Target, posted a 4.1-percent increase in same-store sales, led by strong sales in late December. Total sales increased 9.9 percent to $7.74 billion at the Minneapolis-based discounter.
"To some extent, Target is struggling to keep shoppers coming back," Russell said. "Part of Target's challenge is how to keep things fresh. They have to figure out how to be new and unique and different again."
In the much-sought-after teen market, consumers warmed up to Pacific Sun and Hot Top Inc., while cooling to former must-haves Abercrombie & Fitch and American Eagle. Hot Topic's same-store sales rose 10 percent from the same period last year.
"We're sort of in the middle of Hot Topic's reign and sort of at the beginning of Pacific Sun's," Jones said.
The reign could be over for the other chains.
"The appeal is off Abercrombie & Fitch, they've sort of fallen back to their peers," Jones said. "American Eagle really struggled this year."
The season wasn't much better for toy retailers who were hurt by the lack of blockbuster products and the growing number of outlets. Wal-Mart's decision to slash toy prices did nothing to help FAO Schwarz, KB Toys or Toys "R" Us Inc. FAO Inc., the parent of the FAO Schwarz toy chain, filed for bankruptcy last month, KB Toys didn't pay some suppliers and Toys "R" Us late last year announced it was closing its Kids "R" Us division.
"All the toy retailers struggled this year," Jones said. "We've seen just an explosion of outlets that carry toys."
Toys "R" Us said yesterday its overall sales rose less than 1 percent during the period, but that sales at U.S. stores open more than a year fell 4.9 percent.
Michael Levy, a professor of marketing at Babson College, said toys have become a "quasi-commodity."
"When it comes to toys and it comes to young parents, it comes down to price," Levy said. "Young parents are very price sensitive."
How the war in the toy aisles affected Hasbro, of Pawtucket, will be clearer next month when the company releases its seasonal sales data.
Alan Rifkin, a retail analyst with Lehman Bros., said the way retailers finished the year leaves him more optimistic about 2004.
"Heading into 2004, the consumers are showing signs of vitality," Rifkin said.
One key will be whether the "jobless recovery" continues, Rifkin said. He noted that a recent survey of economists predicted that unemployment would drop to 5.4 percent this year from 5.9 percent last year.
Rifkin tempered his enthusiasm because of the unsettled question about job growth and an expected rise in interest rates.
"We think that the economy will do well but the stocks may not do so well in the second half of the year," Rifkin said.
