US retailers fear blue Christmas
Bargain hunters out in force in US shopping malls
December 26 2002
US retailers are expecting to have had their most disappointing Christmas figures in more than 30 years once the figures are added up.
Fears over the economy and the looming threat of military action in Iraq kept many shoppers at home; those that did venture out were mainly hunting for bargains as overstocked retailers discounted.
Christmas Eve, when many people in the US travel to visit friends or relatives, traditionally only accounts for about 4 per cent of overall holiday sales, with the week before Christmas accounting for 34 per cent last year, compared with less than 24 per cent in 1999, according to the Internationa Council of Shopping Centres.
The Saturday before Christmas tends to be the busiest holiday shopping day, a trend which continued this year, although Sunday’s takings were weaker than expected, according to analysts. Target, JC Penney and Federated Department Stores, which operates Bloomingdale’s and Macy’s, reported that the last minute sales push failed to materialise.
Federated said that sales in the seven days ended Saturday “did not strengthen as much as anticipated, ” and warned that like-for-like sales for November and December are likely to be lower than its previous estimate of between flat and a 2.5 per cent drop. Wal-Mart Stores said that like-for-like sales for December have at the lower end of its target of a 3 per cent to 5 per cent gain.
Kurt Barnard, president of Barnard’s Retail Trend Report, said: “The heavy discounting is moving some merchandise but not enough that would be necessary make up for the shortfall in gross margins. The season was a shoppers’ paradise, though a lot of shoppers could not take advantage of the deals because of their economic situation.”
However, many hope that the last week of December will help recoup some of the lost sales. The week ending December 31 accounts for about 10 per cent of US holiday sales, according to the ICSC. Mall operators such as Taubman Centers, which operates 31 shopping malls, are also hoping that gift-certificate sales will help lift overall results. The company said one-third of its malls recorded their biggest ever sales in gift certificates on Monday, December 23.
