Shoppers, retailers play holiday roulette

Buyers procrastinate, some await better sales

December 23, 2005|By ANDREA K. WALKER | ANDREA K. WALKER,SUN REPORTER

The holiday promotions start ever earlier in the season - and people keep shopping ever later.

As of Sunday, seven days before Christmas and the start of Hanukkah, only 26 percent of households had finished their holiday shopping, down from 31 percent at the same time last year, according to a consumer survey by the International Council of Shopping Centers. A similar study by America's Research Group, a Charleston, S.C., company that follows consumer behavior, found that 34.7 percent of shoppers had finished their shopping a week early, compared with 42 percent last year.

And another survey, conducted for the National Retail Federation, found last weekend that 17.9 percent of men and 12.5 percent of women hadn't even started.

People used to shop consistently throughout the season. But in recent years, consumers stoked by marketing that begins as the leaves turn color have turned out in droves for specials on "Black Friday," the day after Thanksgiving. Then things taper off until a second mad rush the week - even more so, the weekend - before Christmas.

"Consumers are out in throngs looking for those bargains at the very beginning and the very end," said Michael P. Niemira, chief economist and lead researcher for the International Council of Shopping Centers. "That has been an evolving pattern that has become very problematic for the industry. You're so dependent on specific days or events, and you don't have a steady stream of buying."

Those who follow the industry offer a mix of explanations for the pattern, including procrastination and retailers conditioning shoppers to expect more bargains the longer they hold out. This year, experts add jitters about gas and home heating prices, and a late start to colder weather, which hurt sales of outerwear.

Leah McCann, a freshman at Salisbury University, said she has two words to describe why she waits late to shop: "Better sales," she said while picking up gifts Wednesday at Owings Mills Mall. She also said she has more time after final exams.

"I work better under pressure," said the 18-year-old, who lives in Hampstead.

Whatever the reasons, this pattern has put retailers in a predicament, more dependent on a smaller window of time to make or break their businesses for the year. A snowstorm the week before Christmas and sales are blown. In New York City, the strike by transit workers this week is expected to be a major loss to retailers who couldn't get shoppers or employees to their stores.

Retailers are forced to play a waiting game, wondering whether consumers are waiting until the final days or deciding not to spend more. Most local malls and many chains such as Hecht's and Macy's will stay open until 11 p.m. or midnight today to try to lure them in.

Part of the delay of the season follows a trend of consumers buying items closer to when they need them. They buy coats when it's cold, not weeks before. Back-to-school shopping once peaked in August, before classes started; in recent years, retailers find themselves waiting well into October to assess back-to-school sales because kids are waiting to see what their peers are wearing.

Unwittingly, retailers may have helped create the pattern of last-minute buying by conditioning shoppers to expect sales. Wal-Mart and other retailers have tried to resist - and suffered disappointing sales when they didn't offer hefty markdowns. After being undercut by some competitors the day after Thanksgiving last year, Wal-Mart launched an aggressive marketing campaign and slashed prices on coveted items to win back shoppers.

This year, retailers tried to spread their bargains throughout the season, promoting them heavily in newspapers, through e-mail and on television. Early bird specials once reserved for the day after Thanksgiving have been offered throughout the season by retailers such as J.C. Penney.

But early evidence has shown that it might not be working for everybody. Overall sales for the week ending Nov. 26, which included Black Friday, were 5.1 percent higher than for the same weekend last year, according to the ICSC. But sales the following week fell 3.1 percent from Black Friday week.

"We've been very aggressive in a number of ways from the beginning, and we will continue to be aggressive," said Marty Heires, a spokesman for Wal-Mart. "The final week has been important for a long time. You get some initial excitement early in the season, but let's face it, a lot of us are procrastinators."

Even with all the bargains, the holiday shopping season is shaping up as mediocre at best, according to many analysts. ICSC predicts a 3 percent to 3.5 percent increase. The National Retail Federation expects a 6 percent increase.

Continued growth in online shopping and gift-card giving may also be affecting the rushes at the beginning and end of the season. Shoppers at Owings Mills said they placed orders early on the Internet to beat shipping deadlines, then picked up other items in the past week.

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