Stores court shoppers with expanded hours, deep discounts
NEW YORK (AP) – Despite jammed stores and malls during the last weekend before Christmas, retailers remain anxious and uncertain after a desired sales bonanza failed to materialize. Many storeowners disappointed by consumers’ cautious buying are now looking with some desperation to last-minute shoppers and post-Christmas bargain hunters for some relief in what has been a difficult holiday season.
Federated Department Stores Inc. reported Monday that sales through the seven days ended Saturday “did not strengthen as much as anticipated.” As a result, it warned Monday that sales for November and December will most likely be below its goal of unchanged to up 2.5 percent from a year ago.
J.C. Penney Co. Inc. said that sales in its department store business for the week ended Sunday were weaker than anticipated, and now month-to-date sales are running only slightly above its goal for a 1 percent to 3 percent increase.
At K-B Toys Inc., “we are happy that we are holding ground, but we were really hoping for a higher increase” during the weekend, spokesman John Reilly said Sunday.
Analysts said other merchants had a similar experience.
“It was a solid weekend, but retailers needed a spectacular weekend,” said C. Britt Beemer, chairman of America’s Research Group. “It was what I expected, but not what I hoped.”
Kurt Barnard, president of Barnard’s Retail Trend Report, believes that sales at stores opened at least a year, known as same-store sales, could fall below his already reduced 2 percent forecast. Same-store sales are considered the best indicator of a retailer’s health.
“The season is reflecting great spending caution and could be the weakest in a dozen years,” Barnard said.
Retailers had a good start to the season with better-than-expected sales during the Thanksgiving weekend, but sales subsequently were surprisingly weak. Analysts say consumers have cut back on their spending because of worries about job security and the economy’s uncertain recovery.
Merchants, facing a season with six fewer days than last year and disappointing sales, were counting even more on this past weekend. Saturday, reflecting a long-standing tradition, was expected to be the busiest shopping day of the year.
At the malls and on Main Street, shoppers were searching for the best price, and retailers were accommodating them with two-for-one specials and other deep discounts.
At Sears, Roebuck and Co., the company offered a 10 percent discount on nearly everything in the store from 7 a.m. to 10 a.m. on Saturday. Gloves and other cold weather merchandise, as well as digital cameras and jewelry did well, according to Ted McDougal, a company spokesman.
Still, business over the weekend was in line with the company’s modest expectations, though McDougal declined to be more specific. Overall, Sears expects a mid single digit decline in holiday sales from a year ago, he said. The company is expected to report results for the past week late Monday.
K-B Toys, which offered discounts anywhere from 10 percent to 30 percent, reported that while customer traffic was strong, sales only showed a slight gain from a year ago over the weekend.
The retailer is now focusing on the final days of the month to recoup business.
Shoppers interviewed this weekend liked the lower prices.
John Crudo, from Brunswick, N.Y. said that one of his rewards for procrastinating was that he saved 50 percent on a $500 bracelet for his wife.
Bargain hunter Tammy Drumright of Westminister, Co., picked up holiday ornaments – a tin rocket and robot – for her niece and nephew at a 30 percent discount at Cherry Creek Mall in Denver.
“They were already on sale when traditionally stores wait until after Christmas,” she said.
But the heavy markdowns might take a toll on retailers’ earnings, an especially painful result, because many merchants hope to bring in half their annual profits during the holidays, according to Fred Crawford, executive vice president of Cap Gemini Ernst & Young.
Last week, a number of stores, including Electronics Boutique, Best Buy Co. Inc., and Barnes & Noble Inc. reduced their fourth-quarter earnings.
Even Wal-Mart Stores Inc., the world’s largest retailer, said Monday that it continues to see sales tracking at the low end of its projections for a 3 percent to 5 percent gain in December. The company noted that buyers are buying closer to the season, noting that sales of seasonal decorations, which traditionally take off earlier in the month, only picked up last week.
Wal-Mart’s sales results included the seven days ended Friday.
The National Retail Federation, an industry group, was holding on to its optimism, and to hopes that procrastinators will give stores a boost. The NRF estimated that 35 percent of consumers hadn’t completed their shopping as of last Monday.
Taubman Centers Inc. reported that traffic and sales were up in the single digits this past weekend based on a survey of 10 of its 31 malls, according to Karen MacDonald, a spokeswoman for the Bloomfield, Mich.-based mall operator.
One of the brightest spots has been gift certificates, sales of which are up anywhere from 25 percent to 50 percent, MacDonald said.
“The season isn’t over. We are now in the most important days,” she said.