People shop, prices drop
Extra days in the shopping season meant more time for some people to put it off. The start was slow, but retail sales number look on target.
By MARK ALBRIGHT
Published December 21, 2005
[Times photo: William Dunkley]
Crowds of serious buyers are out taking advantage of price cuts stores are making to dump unsold merchandise. Here, shoppers walk past Luggage & Gifts at Tyrone Square Mall.
Sharon Hill waited until Tuesday to begin her annual holiday shopping blitz.
"I think for weeks about what I want to buy, then try to get it all in one day," said the 48-year-old St. Petersburg accountant who had made 15 gift purchases by Tuesday afternoon. "I'm down to just my husband and son-in-law."
Late starters have been legion this year thanks to weather, economic uncertainties and a calendar that handed shoppers an extra two days to put off getting started.
A National Retail Federation survey estimates 13 percent of shoppers are done shopping while 17 percent had yet to buy their first present at the beginning of the final week.
But with crunch time imminent, the crowds of serious buyers are out in force and price-cutting to dump the unsold merchandise is taking on a sense of urgency.
Indeed, sales in stores open more than a year lurched upward sharply over the weekend to a pace signaling a moderate 3.9 percent gain for the two-month season, according to the International Council of Shopping Centers retail index. The index does not include Wal-Mart. But officials of the nation's biggest retailer reported their same-store sales remained on track for a 2 to 4 percent gain in December.
"It's been a late season that crept up on people, but we're very busy now," said Lita Sargent, manager of Tyrone Square Mall in St. Petersburg. "Every night this week we'll be busier than the same night last year."
That's because Christmas this year falls on a Sunday. So virtually all mall stores will close at 6 p.m. Saturday. Only JCPenney and most grocery stores plan to stay open as late as 7 p.m. on Christmas Eve. That means the biggest volume shopping day of the year probably was last weekend, a calendar quirk that's left people several week nights and most of what will be a last-minute Christmas Eve rush to get the job wrapped up.
"The prices are a lot better and I should be done tonight, but I still feel like I've been foot-dragging," said Jennifer McAndrew, a 28-year-old server at a Madeira Beach restaurant.
Nationally, the retail federation and shopping center trade groups have forecast a 6 percent gain in general merchandise sales, or about 4.5 percent in stores open more than a year. That's a bit more optimistic than what the early numbers are suggesting, but a big final week frequently perks up what had been a lackluster season.
The Florida Retail Federation on Tuesday released its survey that showed Florida and Tampa Bay area shoppers entered the season with bigger spending plans than the national average.
Nationally, 16 percent of shoppers planned to spend more on gifts while 21 percent did in the Tampa Bay area. The federation said that meant 64 percent of shoppers plan to spend the same or more than they did last season, 3 percentage points higher than the national figures. The same survey, however, can be spun to read that 64 percent plan to spend the same amount or less.
Unfortunately for retailers, the weather provided about all the lift they can expect to get this season. In Florida, retailers got a week of cloudy and gloomy weather the past week that is forecast to turn warm and sunny until Christmas. Last week's chill helped stores unload sweaters at higher prices than they would have fetched this week.
"Clouds and rain are like winter in Florida, so people go out to shop," said Paul Walsh, senior vice president of business forecasting for Planalytics, a Wayne, N.J., weather service used by many big retailers to shift inventory and link promotional sales events to weather patterns. "This warming trend will be better at encouraging people to go to the beach than go shopping."
The holiday season is a big deal for retailers. Many that sell general merchandise, apparel and furnishings get up to a third of their annual sales and half their profits for the year in the final two months.
But with consumers professing frugality after racking up record consumer debt, enduring a rugged hurricane season and paying more for gas, retailers saw less reason to stock up as aggressively.
The result this year appears to more discipline in cutting prices on leftover seasonal merchandise. While pre-Christmas price-cutting is rampant again, many shoppers noticed the discounts are not as deep or widely spread.
With gift cards being the most popular single gift this year, many retailers are holding the line on prices until the week after Christmas when hordes of shoppers are unleashed to begin cashing in those cards.
Chains under the most pressure to cut prices because of heavy inventory loads are American Eagle Outfitters, Gap, Express and Sharper Image, said Thomas Filandro, a New York analyst who monitors retailers for Susquehanna Financial Group. He cited Victoria's Secret, the Childrens Place, Claire's, Gymboree and Build-a-Bear Workshops as having merchandise hot enough to hold up prices.
Mark Albright can be reached at firstname.lastname@example.org or 727 893-8252.
[Last modified December 21, 2005, 00:51:17]
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