You are the owner of this page.
A2 A2

The gazebo at Canyon Lake Park, submitted by Patricia Wright.

Strong economy does little to lift department store sales

NEW YORK — Many investors had expected department stores to enjoy robust sales over the holidays in light of a U.S. economy buoyed by low unemployment, higher wages, strong consumer confidence and cheap gas.

So when Macy's and Kohl's reported lackluster numbers on Thursday, they were taken aback, sending retail stocks into a tailspin and calling into question whether such mall-based chains can compete in a changing landscape where shoppers are shifting more of their spending online.

Macy's saw only a slight increase of 1.1 percent in sales during November-December at stores opened at least year. And while sales were strong during Black Friday and Cyber Monday, the company said sales fell off noticeably until the week of Christmas.

Meanwhile, Kohl's reported a small sales growth that showed a dramatic slowdown from a year ago. Comparable sales rose 1.2 percent, versus 6.9 percent in the previous year.

Shares of Macy's plummeted more than 19 percent, on track for the worst day ever. Kohl's stock was down nearly 7 percent. Even Target's stock took a hit, falling nearly 4 percent despite showing strong holiday sales.

Earlier this week, J.C. Penney, one of the stragglers in the department store sector, reported a drop in comparable store sales of 3.5 percent for November and December. But because Macy's is considered a barometer of spending, particularly for the middle class and for mall spending, investors may be looking for deeper meaning in its performance.

"Macy's report spooked investors because investors expected it to be a great holiday season across the board," said Neil Saunders, managing director at GlobalData Retail, a retail research firm. "Now, they're questioning how good the holiday season was. There is a lot of uncertainty out there."

Adding to the uncertainty is that investors will not be getting December's monthly retail sales data next week from the Commerce Department if the government shutdown is still in effect, as most observers expect. Saunders said investors are also worried that a recovery among traditional stores like Macy's is losing momentum, raising concerns that they might have to ramp up investments even more to increase sales.

Analysts say factors like a shift to online spending and consumer preferences for so-called experiences like spas and restaurants have hurt impulse spending that likely put a dent in December's figures for Macy's and Kohl's.

Online sellers are relentlessly growing their share of retail sales. In November, e-commerce and catalog sales jumped 10.8 percent from a year earlier, according to Commerce Department data, more than double the overall sales increase of 4.2 percent. Department store sales slipped 0.2 percent during the same period.

Analysts also point to factors that hit Macy's in particular. Some believe, for instance, the company may not have done enough to make its merchandise and marketing compelling for customers as it tried to compete against online players like Amazon.

Target, on the other hand, bucked the trend by posting strong online growth in November and December. Merchandise ordered online and picked up at stores surged 60 percent. Those sales are key to Target's campaign to hold online retailers like Amazon at bay, particularly during the competitive holiday season, because shoppers can dodge shipping fees.

Target Corp. said Thursday that sales at stores open at least a year increased 5.7 percent in the period, up from 3.4 percent a year earlier. Comparable online sales climbed 29 percent.

Three crowned during Miss Rapid City pageant

Three women were crowned with new titles at a pageant put on last weekend by the Miss Rapid City Organization. 

Jackie Bossman, 23, was crowned Miss Rapid City 2019. She attends Creighton University School of Law. She also won the interview award.

Ria Gualano, 17, was crowned Miss Central States Fair. She attends Johns Hopkins University. She also won the talent award at the pageant

Danielle Nowell, 14, of Hitchcock-Tulare, won Miss Once Upon a Festival’s Outstanding Teen. 

The women will advance to the Miss South Dakota Pageant and The Miss South Dakota Outstanding Teen Pageant in Brookings in May. As well as securing a spot to compete at the state level, all three women won scholarship funds.

Two Cents comments for Jan. 11

Kudos to Dusty Johnson for not accepting pay while the government is shut down. Thune, Rounds and all in Congress should have the guts to do the same thing until they get something accomplished regarding the wall and the shutdown.

Each council person who denied Dick and Jane's should write a personal check to settle the lawsuit they knowingly created.

I have witnessed layoffs and plant closings but never encountered a federal employee that cared about the plight of those who lost their jobs, but now I am supposed to care about the federal employee getting paid to stay home during the shutdown. I’ll return their empathy by not caring about their plight.

I’m asking myself why anybody would support any business in town that would be so willing to subject the city to such frivolous lawsuits?

Most people are looking at affordable health care and affordable college to better their lives, but Noem and the Republicans are more concerned about high school kids taking a citizenship test?

Yes, affordable housing is a huge problem in Rapid City. The mayor campaigned on solving that problem in his first term but apparently had more at stake with the year-long campaign for the civic center than the citizens.