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NEW YORK CITY-Entering the critical holiday sales season, a report on the weekly sales numbers for the country’s retailers, the International Council of Shopping Centers-UBS Weekly U.S. Retail Chain Store Sales Index, has tracked a dip in sales for the week ending Dec. 4, 2004, compared with the previous week. Sales were down 1.7% overall for the week, though the period did compare favorably to the same period 52 weeks ago, coming in 3.3% higher, a figure at least partly attributable to a major winter storm that stuck the northeastern United States at that time.

The sales index measures nominal same-store sales, excluding restaurant and vehicle demand. The weekly index is statistically benchmarked to a broad-based monthly retail industry sales aggregate that currently represents about 75 retail chain stores, a tabulation also compiled by ICSC. A representative sample of those major retailers is used as a control group to extrapolate the weekly sales index, and so the weekly index represents industry sales statistically, and isn’t just a sum of sales for a handful of retailers.

The week’s drop in the index doesn’t necessarily bode ill for sales throughout the rest of the season. “So far, this holiday season has been following the same shopping pattern as we experienced last year–a moderate start with softness the week following,” said Michael Niemira, ICSC’s chief economist and director of research. “It may very well mean that the consumer will step up their holiday shopping and spending over the upcoming weeks to finish the 2004 holiday season on the strong side.” For December, ICSC expects sales to grow by 3.5% to 4.0%, on a year-over-year basis, Niemira added.

The results of an ICSC consumer-spending survey seem to bolster this argument. People still plan to do a lot of buying between now and Christmas. The ICSC-UBS ongoing holiday shopping survey, conducted between December 2 and 5, found that 32% of shoppers were more than half completed with holiday gift buying, up from 25% in the prior week. But still only 9% have totally completed their gift shopping.

Regarding which kinds of goods are likely to do better this season, the ICSC is putting its money on the upscale side of the equation. “High gasoline prices caused a dichotomy in consumer spending trends between low-income and high-income oriented retailers,” the report notes. “As a result, high-end and upscalers are where the consumer focus should be. Digital cameras, jewelry, men’s apparel and women’s accessories should do well.”

ICSC has also revised its predictions for this month’s sales for various retailers, based on their performance during the week. Target and Kohl’s were the big winners, with their estimates revised upward by 4.0% and 3.0%, respectively. Wal-Mart and Federated each scored a 2.0% revision, but May’s and JC Penney’s didn’t fare as well, with their sales estimates for the month revised downward by 3.0%.

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