Late shoppers come to rescue of holiday season for retailers

Range of stores report the biggest sales gains of the past four years

January 09, 2004|By Andrea K. Walker and Dan Thanh Dang | Andrea K. Walker and Dan Thanh Dang,SUN STAFF

Shoppers delivered a late-season surprise to the nation's retailers.

Retailers thankfully reported yesterday that a sales spike late last month more than salvaged the Christmas shopping season after several years of sluggish holiday shopping results.

Those reporting gains ranged from high-end stores to discounters to department stores. Many posted their biggest holiday gain since 1999, when sales increased 5.4 percent in November and December.

Internet shopping began the season strong - and finished that way.

Online shoppers spent a record $18.5 billion, excluding travel, last month, according to the eSpending Report from Goldman Sachs & Co., Harris Interactive and Nielsen/Net- Ratings. This was 35 percent more than during the 2002 holiday shopping season.

Retail sales in November and December increased 4.2 percent, compared with a meager 0.5 percent rise the year before, according to the International Council of Shopping Centers in New York, which tracks 80 chains.

High-end stores such as Neiman Marcus Group, Nordstrom Inc. and Tiffany & Co. were the top performers. But discounters such as Wal-Mart Stores Inc. also reported better-than-expected sales.

"We normally see our sales drop off at the end of the month after Christmas, but this year the week following Christmas was better than it's ever been," said Alissa Carr, director of advertising and marketing at South Moon Under.

The Berlin, Md.-based upscale designer clothing boutique saw heavier traffic even though it didn't offer any bargains. One of its strongest performers was swim wear - a possible sign that more people are taking luxury trips.

The season started off slow as snowstorms discouraged shoppers throughout the Northeast. But procrastinators helped turn things around the week of Christmas, including the day after, when bargain-hunters and people cashing in gift cards helped to further boost sales.

"The gift cards were extremely important in driving sales in the days immediately following Christmas," said Kurt Barnard, president of Barnard's Retail Consulting Group in Upper Montclair, N.J.

"Most of these gift cards were redeemed right after the holidays for merchandise that was marked down deeply," Barnard said.

Online, more than half of 85 retailers reported seasonal revenue growth of 25 percent or higher than 2002 levels, according to a Shop.org/BizRate.com study. Almost a third reported revenue increases of 50 percent or more.

Wal-Mart, the nation's largest retailer, yesterday posted a sales increase of 4.3 percent for December.

Early last month, the Bentonville, Ark., chain had predicted sales on the low end of a 3 percent to 5 percent range. Last-minute purchasing helped exceed that expectation, the company said.

"Increased traffic in the fourth and fifth weeks of the period really helped," spokeswoman Sharon Weber said.

Hecht's, a division of May Department Stores Co. in St. Louis with a large presence in the Baltimore-Washington market, reported that the chain did better than expected thanks to sales of monogrammed merchandise and high sales in new electronic divisions it added to several stores last year that sell DVDs, digital cameras and the Apple Ipod.

Sears, Roebuck and Co. had predicted a flat or single-digit drop in sales early in the season, and became worried midway through last month when shoppers weren't buying. The Illinois retailer ended the season exactly where it predicted and better than some analysts had predicted, said Ted McDougal, a Sears spokesman.

Sales were down 0.8 percent in December and 3.6 percent in November. The year before, sales were down 10.9 percent in November and 2.6 percent in December.

Sears.com posted a 30 percent increase in sales for 2003.

"We basically saw a surge in last-minute shopping and post-holiday clearance activity," said McDougal, who added that electronics, footwear and tools were the top sellers.

Barnard warned that even though sales were up for many retailers, profits might not be as good because much of the shopping was done after merchandise had been marked down.

"As far as profits are concerned, we'll have to wait and see," he said. "There is very little question that consumers continued to be very cautious. The consumer this time around looked at the price tag before the product."

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.