US retail to cash in post-Christmas
$17bn gift card market bring out the shoppers
December 26 2003
US shoppers are set to give retailer their most lucrative December 26 ever as the gift card trend continues to grow.
The use of the plastic, credit card sized gift certificates has doubled in the US over the last year, according to trade body the National Retail Federation, to create a $17bn market which accounts for 8 per cent of holiday gift spending.
The downside for US retailers is that sales are not officially recorded until the cards are redeemed, which has further depressed spending figures in an already lacklustre run-up to the holidays.
However, following Christmas Day, the shoppers come out in force, joining the post-holiday bargain hunters and boosting retail traffic. As a result, upmarket New York department store Saks Fifth Avenue is among those expecting December 26 to be their biggest day of the year.
Saks Fifth Avenue, along with the other 62 stores owned by Saks, will offer a further 40 per cent off sale stock from 8am to 11am. The fact that December 26 falls on a Friday means few US workers will be returning of the office, which should help spending figures.
There is also likely to be a thirst for bargains because retailers such as Gap and Urban Outfitters adopted a policy of minimising pre-Chrsutmas reductions to reduce the damaging discount wars seen in the run-up to recent US holidays seasons.
Bloomingdale’s chief executive Michael Gould told the New York Times the department store chain was expecting its “biggest December 26 ever,” although not its best sales day of the year, an honour which falls to the Saturday before Christmas.
Gould added that sales of fashion brands such as Burberry, Joseph Abboud, Eileen Fisher and Ellen Tracy are “on fire” at Bloomingdale’s.
At fashion chain Nordstrom, designer merchandise has also done well. Retail analyst Jennifer Black told the New York Times: “The consumer took them upscale, by demanding brands like Burberry. Even with lower-priced brands, like their Classique in-house brands, they came out with new fabrics and they guessed right across the board.” She predicted the chain would have its best Christmas in 10 to 20 years.
