Retailers yearn for year-end rush Discounts, online sales may help slow season

December 29, 1998|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

Retailers are hoping a last-minute burst of Christmas shopping and post-holiday bargain hunting over the weekend could save a season that got off to a disappointing start.

At Electronics Boutique in Towson Town Center, business dragged at first, then built as consumers snapped up nearly impossible-to-find items such as Gameboy Color for $79.99 and kept shopping -- after Christmas -- to the great satisfaction of store manager Alex Campbell.

"Business is up over last year, but it definitely got busier toward the end," Campbell said yesterday, adding that Saturday was one of his best days. "It was better than Black Friday. I only did more business probably the week of Christmas."

Some consumers, beating those who lined up before dawn on Saturday for bargains, got a jump on post-Christmas shopping by going online. America Online, which said yesterday that 1 million members made their first online purchase this season, opened its Mega Clearance Area on Christmas, and retailers such as Eddie Bauer, Levi's, Lillian Vernon and BarnesandNoble.com offered discounts of up to 60 percent.

In another measure of the growing influence of Internet shopping, shares of SkyMall Inc. nearly tripled yesterday after the nation's largest in-flight catalog retailer said it expects online sales for the year to increase sevenfold.

"This really marked the first time we saw online buying patterns mirroring the off-line world," said Wendy Goldberg, an AOL spokeswoman, who said toys have been the top category. "People will still be looking for bargains, but there are no crowds. It's just you shopping in your pajamas."

The post-holiday shopping frenzy, spurred by promotions and discounts as deep as 70 percent, likely will help boost sales over last year's. Last-minute buying helped sales at more than 2,500 specialty stores in 48 regional malls across the country, according to a survey released yesterday by the International Council of Shopping Centers, which reported a 5.3 percent gain.

But overall sales increases of 4 percent -- forecast by most analysts -- would mean a weaker season than expected.

"The trend in America is people buy later," said Howard Davidowitz, chairman of Davidowitz & Associates, a national retail consulting firm. "This was a very price-driven Christmas. The super bargain hunters are out now, and retailers have to clean up inventory."

But such deep promotions, while helping to clear inventory, are also expected to hurt retailers' profits.

"Margins are going to be pressed more than planned," Davidowitz said. "The markdowns will be much more than they planned. They've carried over goods they didn't expect to."

Continuing a nearly yearlong trend, department stores are expected to be hit hardest, in part because a warm early December cut into sales of sweaters, coats and boots. But department stores face bigger challenges from the discounters, such as Wal-Mart Stores Inc. and Target.

In the International Mass Retailers Association's holiday survey of 1,000 consumers, released last Tuesday, 68 percent of those surveyed said they'd purchased holiday gifts at discount department stores, compared with just over 37 percent who reported shopping at department stores.

Specialty stores, meanwhile, such as Gap Inc. and Abercrombie and Fitch, are expected to turn in solid sales for the season, far surpassing last year's.

Many of the nation's retailers are holding back from assessing the crucial selling period until they tally December sales. Retailers expect to release December sales figures Jan. 7.

Best Buy spokeswoman Laurie Bauer reiterated that as of mid-December, Chairman Richard M. Schulze expected a strong season because of improved efficiencies and strong consumer confidence.

"Consumer electronics products were one of the favorites this season, driven by new technology like DVD, digital cameras and digital cellular phones which have gained consumer acceptance and come down in price," said Bauer.

Pub Date: 12/29/98

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