Steep discounts on clothes, toys and electronics enticed shoppers to
stores this weekend but they still are making fewer purchases leading
into the final stretch of the holiday shopping season.
Based
on early reports from analysts and malls, sales results were generally
mixed to moderately down even as store traffic appeared strong this
past weekend, the second-to-last of the season that can make or break
many retailers.
Stores offered big discounts to shoppers
who have been pulling back their spending, concerned about the
recession and job stability. Shoppers came to stores for these
discounts but largely stuck to their shopping lists and basic items
like clothing, analysts say.
Traffic levels at stores
were comparable to last year, said Marshal Cohen, chief industry
analyst at market research group NPD Group. People were looking for
deals but not as willing to spend their money as last year.
"The number of consumers actually making purchases were down and when they did purchase they purchased less," Cohen said.
Results
were mixed across the country, with electronics still doing well and
stores like warehouse-club operator Costco Wholesale Corp., he said,
were mobbed.
"It wasn't as good as last year but it wasn't as doom and gloom as everyone was expecting," he said.
This
Saturday was the strongest yet this season, said Karen MacDonald, a
spokeswoman at mall operator Taubman Centers Inc. Traffic was up at
stores throughout the country, but in terms of sales, business overall
ranged from slightly above, to flat, to slightly below last year's
levels, she said. Apparel was a top seller while high-end jewelry and
home furnishings were weak.
Figures released Sunday by
SpendingPulse pointed to more signs that shoppers are continuing their
frugal ways, despite a decent Black Friday spending surge.
SpendingPluse is a data service provided by MasterCard Advisors that
estimates U.S. retail sales across all payment forms, including cash
and checks.
From Nov. 28, the day after Thanksgiving known
as "Black Friday," through Dec. 6, luxury sales dropped 34.5 percent
compared to the same period last year, while overall apparel sales fell
22.9 percent. Electronic sales fell 22.3 percent.
Michael McNamara, vice president at SpendingPulse, said consumers are resisting big-ticket items priced $1,000 or more.
"Spending has obviously contracted, but the key question is will it contract even further," he said.
Online
sales last week fell 1 percent to $3.81 billion from the same week last
year, according to research company comScore Inc., which called the
drop 'marginal.'
From Cyber Monday on Dec. 1, which marked
the kickoff to the online holiday shopping season, through Friday,
sales were up 3 percent to $8.26 billion from last year, the firm said
Sunday. Tuesday last week marked the heaviest online spending day on
record with $887 million in sales, the firm said, adding that it
expects online retailers to continue offering discounts on products and
expedited shipping to spur sales. It noted apparel and accessories
sales were up 21 percent in the first 12 days of December, while books
and magazine sales rose 18 percent.
But not all shoppers are easily parting with their money.
John
Collins, an event planner who lives in Brooklyn, was at Crate &
Barrel in Manhattan looking at table lamps and a fondue set. But he
wasn't sure if he was going to buy anything. He said he wasn't feeling
inspired to buy considering everything that's going on.
"It's
not the time to spend money on lavish presents," he said. "It's time to
get back to smaller, thoughtful presents, especially with an uncertain
year coming up. No one I know wants to spend a fortune right now."
This
season could shape up to be the worst in decades as the economy spins
into recession and consumers worry about their slumping investments,
rising prices and job stability.
Same-store sales are
expected to be down as much as 1 percent in November and December,
according to Michael P. Niemira, chief economist at the International
Council of Shopping Centers.
If that holds true it would
mark the weakest season since at least 1969 when the index began. The
only holiday period that was almost as weak was 2002, when same-store
sales rose by only 0.5 percent, Niemira said. Same-store sales are
sales at stores opened at least a year and are considered a key
indicator of a retailer's health.
Slumping sales are
weighing on retailers. Last week they forced retailer KB Toys to file
for bankruptcy protection for the second time in four years. The
86-year-old company plans to begin going-out-of business sales at its
stores immediately.
With spending expected down, stores
have been stepping up their discounts to try to capture whatever money
consumers decide to part with.
At The Mall at Short Hills,
N.J. the storefronts featured bold discount signs to lure consumers in.
Chico's FAS Inc. offered shoppers up to 65 percent off, while Cole Haan
offered $50 off purchases of $250 or more. Ann Taylor Stores Corp.'s
Loft division slashed its clearance merchandise an additional 40
percent, making items like colorful suede shoes, originally priced at
$79, now marked down to $12.88. Saks Fifth Avenue reduced its sale
prices by half, for a total of up to 70 percent off.
Consumers
had said all along they were going to cut their spending, stick to
basics and look for deals, and they've kept their word, said C. Britt
Beemer, chairman of America's Research Group. Retailers got them to
come out to stores with discounts of 50, 60 even 70 percent off, but
this weekend discounts didn't translate into sales.
"The malls had traffic but the stores didn't seem to be so swamped," he said.
Apparel
seemed to be a big item this weekend, he said, especially for children.
Many parents skipped out on back-to-school shopping this fall and are
now looking for clothing deals as Christmas gifts. They'd rather cut
spending on themselves before cutting spending on their kids, he said.
Toys R Us Chief Executive Jerry Storch said people still want to buy toys for their kids, and traffic was strong this weekend.
"What
we've heard from the customers is that the last thing they're going to
cut from their budget is a toy for their child and that's held up
consistently," he said.
Michelle Acton was looking for
deals when she took her children, 5 and 1, to Target in Brentwood,
Tenn., near Nashville, to pick out Christmas gifts using money sent
from relatives. She spent $80 on action figures and a set including a
stroller and play pen for a baby doll.
Acton, a nurse, is
looking for deals and spending less on gifts this year because her
husband was laid off from his job in the drywall industry in February.
She said the family has been pinching pennies ever since.
Lisa
Cumbey, 49, of Richmond, Va., said that with her big circle of friends
and large family, she's cut her spending this year. People are moving
away from the need to buy things, she said at Mongrel, a gift shop in
Carytown, a trendy stretch of boutiques near downtown Richmond, Va.
"Our
families all agreed not to do presents, our co-workers all agreed not
to do presents, so I'd say we've cut it by 80 percent," Cumbey said.
"Nothing extravagant."
