Big finish needed to make holiday sales hit expections
Retail sales are better than last year's, but many forecasters are lowering predictions.
By MARK ALBRIGHT
Published December 24, 2003
[Times photo: Stephen J. Coddington]
Naomi Jorgens of Crystal River maneuvers through crowded aisles at the Kmart store at the Crystal River Mall Tuesday afternoon. "It's been hectic," Jorgens said. "I just want (the shopping) to be over with, but . . . Christmas morning makes it all worthwhile."
Elaine Laverly does her holiday shopping in spurts over several weeks. She waits for prices to drop, then pounces. Her patience was rewarded Tuesday.
"I'll be done with all my shopping today," said the Clearwater nursing assistant, who was stocking up for nine grandchildren at Westfield Shoppingtown Countryside. "They finally got down to some fair prices. I shop all the stores, but the best deals I found were at Dillard's, Sears and Kmart."
A flood of last-minute shoppers like Laverly poured into Tampa Bay area malls and discounts stores Tuesday. Trained by retailers over the years to wait for season-ending bargains, many found prices more attractive Tuesday. Still, most merchants seemed less desperate to dump unsold goods than they have been in years.
The question now is whether a big finish in these final days of the season can salvage forecasts of robust consumer spending.
Retailers on Tuesday said they were pleased with what most called moderate gains. But few were doing cartwheels.
"Traffic and sales are up," said Aj Jemison, general manager of International Plaza in Tampa. "Luxury goods are doing well. Most of our retailers are saying they are up 2 to 6 percent. There is no question we saw less discounting this year than last year."
The National Retail Federation has stuck by its prediction of a 5.7 percent gain in sales of general merchandise, apparel and furnishings during the November through December holiday season over last year's poor performance. But many analysts have trimmed their forecasts to a 3.5 percent to 4.5 percent sales increase.
Consumer spending is two-thirds of the gross domestic product. So analysts who use holiday spending to gauge the health of the economy found little to be bullish about.
"This is not an encouraging message," said Martin Bukoll, an analyst with Northern Trust. "The improving economy and generally improving trends in consumer confidence have not been sufficient to encourage Americans to part with their hard-earned money."
Explanations ranged from widespread cases of the flu to heavy snows that interrupted big shopping weekends in the Midwest and Northeast. Others say the season isn't over until people begin to cash in their gift cards in after-Christmas clearance sales that begin Friday.
"Retailers kept their inventories lean and didn't discount as deeply as consumers have come to expect," said Britt Beemer, an Orlando retailing consultant who dropped his forecast of an overall sales gain this week by a full percentage point to 3.8 percent.
Moderate-price retailers and discount stores, where the less affluent shop, encountered a particularly frugal customer this year because of lingering wage pressures and continued corporate cost cutting.
But luxury merchants such as Neiman Marcus and Nordstrom have posted strong sales gains, supposedly because of a resurgent stock market. Saks Fifth Avenue has had to discount less.
"We were able to sell much more at full price this year," said Linda Zipkin, a spokeswoman for Neiman Marcus.
On Tuesday, Neiman initiated clearance sales on leftover seasonal merchandise such as a $510 Rickie Freeman party dress now priced at $308, a $132 Ellen Tracy blouse on sale for $82 and a scanty, $253 pink lace Le Perla lingerie set cut to $145. Neiman will take an additional 25 percent off the price of marked-down goods Friday.
Saturday appears to have been the biggest shopping day of the year. ShopperTrak, which analyzes traffic in more than 25,000 stores, estimated consumers spent $7.3-billion that day, up 4.9 percent from the Saturday before Christmas Day in 2002. But as many as three days this week could still crack the top five shopping days of the year.
Although the morning crowds were not that big Tuesday, Nicole Santos, a Dairy Queen clerk at Countryside, said, "Just wait. Monday here was ridiculous. Tons and tons of people come right after they get out of work."
Retailers play a waiting game with consumers every year. Retailers try to hold the line on prices because the holidays account for up to half of their profits for the entire year. Consumers hold out in hopes the stores panic for fear of getting stuck with unsold merchandise. This year the pattern was different. Stores were more disciplined about cutting prices, frequently doing so only for a few hours or a few days. Some were coupon sales available only to a store's handpicked best customers alerted by mailings.
While 50-percent-off signs were common Tuesday, they frequently were followed by smaller print noting the half-price deal was available only on the purchase of a second item of equal value.
Some clearance prices at Countryside had little to do with pricing decisions. Everything was marked down 30 percent at the B. Dalton store because the store is closing in January. Clerks at Gadzooks were hanging 50-percent-off tags on already-discounted merchandise after the parent company said it might file for Chapter 11 bankruptcy protection if its holiday sales do not improve.
Prices were not cut on Gadzooks' popular $89-a-pair Von Dutch jeans. But clerks said virtually anything else in the store could be purchased for $5 if bought in tandem with something at full price.
At Burdines, all the fine jewelry has been discounted up to 60 percent because the department store chain is switching suppliers to the one that Macy's uses (but not changing workers) when it changes its name to Burdines-Macy's on Feb. 1.