After-Christmas shopping unlikely to save season
PORTLAND, Ore. – There's holiday joy and post-holiday blues, but for the nation's retailers it's all been one big downer.
The holiday shopping season was one of the most dismal in years and even the after-Christmas period, when consumers normally rush to stores to use gift cards and seize on big sales, isn't expected to be enough to save retailers from a terrible year.
Holiday sales typically account for 30 percent to 50 percent of a retailer's annual total. But shoppers cut back their spending this year as they struggled with job cuts, home foreclosures, portfolio losses and other economic woes.
Analysts have kept slashing their holiday estimates. Michael P. Niemira, chief economist at the International Council of Shopping Centers, now expects that sales at established stores for November and December will fall 1.5 percent to 2 percent — which would make it the weakest holiday season since at least 1969, when the index began.
According to preliminary data from SpendingPulse — a division of MasterCard Advisors that tracks total sales paid for by credit card, checks and cash — retail sales fell between 5.5 percent and 8 percent during the holiday season compared with last year. Excluding auto and gas sales, retail sales fell between 2 percent and 4 percent, according to SpendingPulse.
A better indicator of how retailers fared won't arrive until Jan. 8, when major stores report same-store sales, or sales at locations open at least a year, for December.
Retailers are still trying to entice consumers with big markdowns, extended hours and other perks.
"It has a Black Friday feel to it," said Tom Aiello, a spokesman for Sears and Kmart, likening the post-Christmas promotions to those found the day after Thanksgiving.
Sears stores are opening several hours early and offering doorbuster deals through noon. Shoppers can get jeans for less than $10 or special financing on exercise equipment to help keep their New Year's resolutions.
Kmart is cutting in half prices on necessities, such as fall and winter clothes for the family, and offering deals on seasonal decor.
Although gift cards sales overall are predicted to be down, Aiello said Sears and Kmart have not seen that and are expecting strong redemption. Retailers cannot record a sale on gift cards until they are redeemed.
Toys R Us said it is cutting prices by 60 percent on some brands the day after Christmas. And kids who didn't get the Hannah Montana doll they wanted may be able to find it for half off.
Other retailers such as Target are pushing online deals, rather than in-store promotions, more heavily in the post-holiday period. Target said it is putting thousands of items on clearance and making them eligible for free shipping the day after Christmas.
Others, like Wal-Mart Stores, are waiting until the weekend to make markdowns on items such as televisions, office and home goods but say they will continue in-store promotions of the week.
Several retailers said they will continue or add new promotions in January, as experts predict the recession will carry into 2009.
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