Shopping showdown playing out at malls

Buyers have been putting off holiday shopping until retailers start offering deeper discounts

December 23, 2006|By Hanah Cho | Hanah Cho,Sun reporter

The perennial holiday showdown of wills between retailers and shoppers gets fiercer each year. People shop later and later, waiting for better deals, while retailers hold out, waiting for desperation to overtake the instinct for bargain hunting.

This year, the retailers appear to be blinking.

As shoppers head today into what is expected to be the busiest day of a so-far-modest holiday shopping season, some retailers are slashing prices and offering special promotions and hours normally seen on the day after Thanksgiving.

"Consumers this year have been more bargain-hunting-driven than normal," said Britt Beemer, chief executive of America's Research Group, which tracks shopping patterns. "I'm sure the retailers are a little more nervous than normal."

Everything at apparel retailer Aeropostale, for instance, is 50 percent off. At Sears, virtually everything is on sale, with up to 60 percent off on many items, including jewelry and apparel. Sears also is offering Black Friday-like promotions by giving away $10 gift cards to the first 50 customers in line when doors open at 5 a.m. today.

Apparel and outdoors equipment retailer L.L. Bean is keeping four stores - including ones in Columbia and Tysons Corner in McLean, Va. - open 24 hours a day until Christmas Eve for the first time.

Consumers typically temper their spending after the shopping frenzy of Black Friday, the day after Thanksgiving, before returning for the rush the week before Christmas. But this year, the post-Thanksgiving sales lull has been more pronounced than in previous years, analysts say.

Retail analysts blame a slowdown in the housing market and some concern by lower-income shoppers about energy prices.

The good news for retailers is that there are millions of procrastinators. As of Sunday, only 21 percent of consumers had finished their holiday shopping, down from 26 percent at the same time last year, according to a survey by the International Council of Shopping Centers. Another survey, conducted by the National Retail Federation, found that 17.8 percent of men and 13.1 percent of women had not even started their shopping by Dec. 13.

"The past couple of weeks, customers took a rest," said Howard Davidowitz, chairman of Davidowitz & Associates Inc., a national retail consulting and investment banking firm in New York. "They said, `You know, I'm going to wait. I'll wait for those 50-percent-off signs as a starting point.'

"Now we have a waiting game. And guess what? Retailers are starting to cave in because they're sitting with all the inventory."

Take Anna Kennedy, 56, of Laurel, who said she waited to shop until the last week so she could get better deals.

"I don't believe in spending an outrageous amount of money," said Kennedy, while picking up children's clothes at 60 percent off at the Sears store in Columbia on Thursday.

Sales for the week ending Dec. 16 were 2.4 percent higher than in the same period a year ago, according to the shopping centers council. That compares with a 3.9 percent year-over-year increase from 2004 to 2005.

Sales growth in the first half of this year's holiday season were half of what it was in the comparable period last year, according to SpendingPlus, a retail data service of MasterCard Advisors. About 22 percent of apparel sales were expected to occur in the last five days of the season, according to SpendingPlus, while jewelry retailers were expected to ring up 34 percent of their sales during that period.

"The retailers are controlling their own destiny," said researcher Beemer. "If they give them good discounts, they'll see more shoppers. If they don't give good discounts, they won't see shoppers."

A study conducted last Saturday and Sunday by America's Research Group found that 48.2 percent of consumers who had not finished shopping said they were waiting for bigger discounts, compared with 33.4 percent last year. A similar study conducted from Dec. 14 to Dec. 17 by the ICSC and UBS Securities found that 27 percent of customers are procrastinating because they are waiting for additional discounts.

Some retailers are not budging, sticking to their planned discounts. Others decided to cut prices on apparel earlier than usual because of the unusually warm weather, a strategy that some analysts say could hurt retailers in the long term. Gap, for instance, has cut prices more than once, now offering a lady's puffer vest for $19.99 that started at $59.50 and was marked down in the interim to $29.99.

"Unfortunately, it's a bad strategy," said Michael Niemira, chief economist and director of research for the shopping centers council, noting that the cold-weather season has just begun.

Felicia Fleming, an assistant store manager at the Sears in Columbia, said her job is to move as much merchandise as possible from the stock room onto the sales floor.

"As you see the merchandise on the floor ... being bought, that relieves the pressure and goals are being met," Fleming said.

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