Retailers look past Christmas as sales disappoint
Final weekend not as robust as hoped
Bargain hunters and latecomers flocked to stores this weekend as the retail industry made its last big push for pre-Christmas sales with increased discounts and other come-ons.
But the late-buying binge was not enough to meet sales goals, and retailers are now turning to post-Christmas business to make this season a merry one, according to one report from a national research company.
"These were big days, but they came up short in terms of traffic and sales," said Bill Martin, co founder of ShopperTrak RCT Corp., a research firm, referring to this past Friday and Saturday. ShopperTrak monitors total retail sales at more than 45,000 outlets.
After a stronger-than-expected turnout on Black Friday, the day after Thanksgiving, stores struggled through the first two weeks of December as consumers shopped at a disappointing pace.
Mild temperatures throughout most of the country didn't inspire shoppers to buy winter items. And with Christmas falling on a Monday, the season became another nail biter for retailers as consumers procrastinated with a full weekend to shop before the holiday.
"This is the best time in the world to shop," said Chuck Mingrone of East Haven, Conn., who was leaving a Bath & Body Works stores yesterday at the Westfield Connecticut Post Mall in Milford, Conn., the day before Christmas. He said he expects to do all of his holiday shopping in two hours.
"I do it every year like this," Mingrone continued. "There are no lines and everyone is smiling. Every year, my family makes fun of me for doing this, but they are the ones who are frantic in lines."
Others were forced to shop late for lack of time or because they hadn't been in the mood.
"I don't know. Christmas just crept up on me this year," said Aimee Lovan of Des Moines, who was at the Valley West Mall in West Des Moines, Iowa. "And also the weather. It's been so warm so I haven't been in a Christmas mood."
Based on data released late yesterday by ShopperTrak, sales for both Friday and Saturday generated a combined $16.2 billion, with Saturday's business generating $8.72 billion. But Martin expected Saturday's sales volume to surpass Black Friday's sales, which posted $8.96 billion.
Average weekly sales for December compared with 2005 are up 4.3 percent, short of ShopperTrak's 5 percent holiday forecast.
"We still have the week after Christmas," said Martin. "We are going to need a lot of gift card redemptions." Gift cards are only recorded on a retailers' balance sheet until the cards are redeemed.
This holiday season, consumers shopped early for flat-panel TVs, hot toys like T.M.X. Elmo and new consoles such as Sony's PlayStation3, but held off on apparel, creating a mixed holiday picture.
Bright spots have been the online business and luxury stores. But many mall-based apparel chains were challenged by increased competition from department stores such as Federated Department Stores Inc.'s Macy's and J.C. Penney Co., which are benefiting from industry consolidation and fresh fashions.
Still, many mall-based stores kept to their promotional calendar throughout the season, refusing to buckle down to shoppers' pressure for the best deal. This past weekend, stores slashed prices to tempt shoppers to buy, though Marshal Cohen, chief analyst at the NPD Group, a market research company in Port Washington, N.Y., said that most merchants still weren't "panicking." Stores are realizing the holiday season also includes January, he said.
But, some stores were pulling out all the stops. Gap Inc., which has been languishing, took additional markdowns on everything from T-shirts to hooded sweatshirts and jean jackets at its namesake stores. Long-sleeve T-shirts were slashed to $9.99,from $24.50 at a Gap store in Manhattan.
Those who delayed shopping saw big benefits in waiting.
Retired school principal Carol Beck, now of Durham, N.C., was doing most of her holiday shopping yesterday and finished in about 30 minutes. She said she spent $150 and bought most things at 50 percent off.
Other shoppers were already done, but came to the mall yesterday to see if any other items struck their fancy.
"I buy extra gifts just in case I forget people," said Mina Singzon from Los Angeles, who was at the Glendale Galleria in Glendale, Calif. "That happens sometimes."
Taubman Centers Inc., which operates or owns 23 malls in 11 states, reported that business, based on a sampling of malls, was tracking up mid-single digit percentage increases for the week ended Saturday compared with a year ago. On Saturday, sales were up anywhere from mid-single to low-double digit increases from a year ago.
Billie Scott, spokeswoman at Simon Property Group, which owns or operates 175 malls in 38 states, said that half of the malls that were sampled reported traffic and business on Saturday was about the same as the previous Saturday; the other half said traffic was lighter, but spending was up.
Santa Monica, Calif.-based Macerich Co., which operates 80 malls nationwide, reported that traffic was up 36 percent in the week ended Saturday from the previous week.