Last chance fizzles

Post-holiday sales can't fix retail year

December 27, 2008|By Liz F. Kay | Liz F. Kay,liz.kay@baltsun.com

Retailers slashed prices the day after Christmas as much as 60 to 80 percent and extended hours to attract customers, but it appears their efforts will not be enough to salvage a dismal holiday shopping season.

Early figures indicated a drop of as much as 8 percent in holiday spending this year, and retail observers reported lackluster crowds yesterday at malls and big box stores nationwide.

"Everybody was saying it's going to be the second Black Friday," said Shavoune Desper of Laurel, who was shopping at Arundel Mills mall with her aunt Yolanda Townsend and several nieces and nephews.

When they arrived at 9 a.m., she said, "the parking lot was almost empty."

Usually retailers make 14 percent of their holiday sales in the last week of December, said C. Britt Beemer, CEO and founder of America's Research Group. However, "the 14 percent can't change the 86 percent that went before it," he said.

Gift card sales were down this year, and those usually drive end-of-December purchases. Beemer suspected most transaction this week would be trades - exchanges of products rather than new sales.

That's what drew Connie Johnson of Alexandria, Va., to Arundel Mills with her two daughters about 10 a.m. yesterday.

"We came up to exchange something and then we found some bargains," she said. After returning a gift at Tommy Hilfiger, the three picked up shoes at Nine West and clothes at Ann Taylor Loft.

Johnson said she wasn't directly affected by adverse economic conditions this year, so she didn't limit her Christmas shopping very much, but that kind of spending won't continue.

"Now, after Christmas, we're going to be buckling down," she said. "We just don't know what's going to happen."

The economy made the holiday season - which typically accounts for 30 to 50 percent of a retailer's annual total sales - less than jolly for most stores.

Job cuts, portfolio losses and other economic woes have caused consumers to cut back their spending. Across the country, strong winter storms during the holiday season kept some would-be shoppers at home.

According to preliminary data from SpendingPulse - a division of MasterCard Advisors that tracks total sales paid for by credit card, checks and cash - retail sales fell between 5.5 percent and 8 percent during the holiday season compared with last year. Excluding auto and gas sales, they fell 2 percent to 4 percent, according to SpendingPulse.

Sales of women's clothing dropped nearly 23 percent; men's clothing sales slipped more than 14 percent. Footwear sales declined 13.5 percent. Sales of electronics and appliances fell even more drastically, dropping almost 27 percent.

"We cut back, just because of the state of the economy," Keith Bigelow of Arnold said as he waited outside Starbucks in Arundel Mills with his two sons. "We don't anticipate the cost-of-living raises we've gotten in previous years."

His wife, Ramona, needed to return items, including a defective child's toy. Keith, on the other hand, had waited until after Christmas to pick up presents for his mother and others.

Crystal Contee said her three daughters were banking on steep post-holiday discounts.

They asked for gift cards in addition to traditional presents "so they can get whatever else they want at a cheap rate," Contee said as she waited in front of Victoria's Secret for two of her charges.

"They're in there," Contee said. "It's just a matter of getting them out."

For some gifts, the Washington resident took advantage of lower prices available online but avoided shipping charges by picking up items at the store.

Internet sales were a relative bright spot this year, with online sales particularly strong in the last two weeks of the season when storms snowed in some shoppers. Web sales dipped just 2.3 percent from last year, according to SpendingPulse.

Online retailer Amazon.com said yesterday that the 2008 holiday season was its "best ever," with more than 6.3 million items ordered. Holiday best-sellers included the Nintendo Wii, Samsung's 52-inch LCD HDTV, the Apple iPod touch and the Blokus board game.

Marshal Cohen, chief industry analyst at market research firm NPD Group Inc., said Amazon did a great job offering deals and drawing customers to its site, adding that "the best possible prices" were frequently on Amazon.com.

Some customers were shocked by the discounts they were seeing yesterday.

"Once upon a time to get 50 percent off was amazing. Now it's 75 percent," said Michaela Conley of Columbia.

Her daughter Lacey, visiting from Chicago, had picked up a new laptop with a 17-inch screen for the bargain price of $800 at Circuit City.

A better indicator of how retailers fared will arrive Jan. 8, when major stores report same-store sales, or sales at locations open at least a year, for December.

The Associated Press contributed to this article.

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