By Andrea K. Walker , andrea.walker@baltsun.com|December 20, 2008
Consumers are expected to pack stores and malls this weekend for a final stretch of shopping before Christmas, but they probably won't spend enough to turn around what has been a difficult holiday season for retailers.
Desperate retailers trying to clear out racks of merchandise will pull out all the stops to squeeze that last dollar from shoppers in what has already been a season of steep discounts. JCPenney will slash prices as high as 70 percent on some items, while Loehmann's is offering 25 percent off entire purchases through Christmas Eve. Macy's will open 13 stores throughout the country for 24 hours, including Tysons Corner, Va., in the Baltimore-Washington area.
The cut in prices probably will come at the expense of revenue, but retailers fear consumers will clamp down even more on spending after the holiday season. Research firm TNS Retail Forward said this week that sales will remain slow next year, and a rebound won't occur until 2010. Best Buy chief executive Brad Anderson said this week that the environment for consumer spending was likely to get worse before anything improves. His statements came after the company reported a 77 percent decline in third-quarter profit.
But lower revenue is better than a rack full of clothes in January, said Bill Martin, co-founder and executive vice president of ShopperTrak, a Chicago firm that follows consumer shopping habits. As banks continue to limit access to credit, retailers will need the cash from sales now to buy inventory for the spring season.
"When inventory sits stagnant, then they don't have cash to go out and buy the spring line. And it just bottles up the whole system," Martin said. "Easy credit is not available, so they're going to have to have cash."
The weekend before Christmas has historically been one of the busiest shopping days of the year as procrastinators rush to buy last-minute gifts and bargain hunters search for late deals. Thanksgiving fell late this year, shortening the shopping season, meaning more people probably will try to cram it in during the next week.
Today, which is dubbed "Super Saturday," is expected to be the second-largest shopping day behind the day after Thanksgiving, according to ShopperTrak.
Most shoppers, however, likely will be carrying fewer bags as they spend less amid worries about job security, weaker stock portfolios and declining housing values.
