Last-Minute Shopping Boosts Retailers

Last minute shoppers wait for at crosswalk the day before Christmas in New York, Monday, Dec. 24, 2007. AP

Just weeks ago, the holiday shopping season seemed headed for disaster. But in the waning hours before Christmas, the nation's retailers got their wish - a last-minute surge of shopping that helped meet their modest sales goals, according to data released late Monday by research firm ShopperTrak RCT Corp.

And with post-Christmas shopping to come, some malls and stores were downright optimistic.

While consumers jammed stores at the start of the season in search of discounts and hot items such as Nintendo Co.'s Wii game console, a challenging economy prompted them to hold out until the end for bigger discounts.

An extra full weekend before Christmas also caused shoppers to procrastinate. In fact, Christmas Eve is expected to be a bigger shopping day than in past years because many employers gave workers the day off, with the holiday falling on Tuesday.

Typically, the last three days before Christmas account for up to 15 percent of holiday sales, reports CBS News correspondent Seth Doane.

"I'm trying to get some deals, seeing what they got out. The sales are better later on. And the stores aren't so packed right now," said Tina Fields, who was at the Circle Centre Mall in Indianapolis early on Monday morning. Her best bargain was a shirt from Aeropostale Inc. she bought for $5. Others like Alex Allen of Boston had postponed shopping because of lack of time.

"I've been working a lot," said Allen, who took advantage of the 7 a.m. opening at a local Target Corp. store to get toys for his three grandchildren before the largest crowds came later in the day.

The spree defied fears that a deepening housing slump, escalating credit crisis and higher gas and food prices would turn shoppers into Grinches - even in the end. Meanwhile, with the season plagued by a slew of Chinese-made toy recalls that began in the summer, there were concerns that shoppers would boycott those products. That didn't happen either.

Still, financial concerns clearly affected how consumers behaved throughout the season, forcing more to trade down to discounters such as Wal-Mart Stores Inc., according to Fred Crawford, managing director at restructuring firm AlixPartners. That trend hurt midprice apparel department stores such as Macy's Inc. and J.C. Penney Co., which have been aggressive with discounts and other come-ons. Ultra luxury stores are expected to fare well, Crawford said.

Toy sales are expected, at best, to match business from a year ago.

"This year, all I'm shopping for are the kids - no adults," said Chevy Edwards of Raleigh, N.C., who was picking through discounted children's clothing at a local J.C. Penney store. "I just need to cut down on bills."

Those stores that didn't meet their pre-Christmas goals are now even more dependent on the post-holiday season, which is becoming more important with the increasing popularity of gift cards. Card sales are expected to hit $26.3 billion in the November-December period, up 42 percent from two years ago, according to the National Retail Federation.

According to ShopperTrak RCT Corp., which tracks total sales at more than 50,000 retail outlets, the week ended Dec. 31 now accounts for about 16 percent of holiday sales. Stores don't record the card sales until shoppers redeem them.

ShopperTrak said late Monday that total sales on Saturday reached $9.36 billion, up a robust 7.6 percent from $8.7 billion on the same day a year ago. That surge will put stores on track to at least meet its forecast of a 3.6 percent sales gain for the season, according to ShopperTrak.

For the Friday through Sunday period, total retail sales soared 18.7 percent from the year-earlier period, though the increase was inflated because Christmas Eve fell on a Sunday a year ago, according to ShopperTrak. Dollar figures were not available for this past weekend.

Scott Krugman, a spokesman at NRF, noted that the season is turning out as expected: The final days before Christmas and the week after Christmas "determine the holiday season."

He expects total holiday sales will meet NRF's growth forecast of 4 percent. That's still below the 4.6 percent growth last year and the 4.8 percent average over the last decade.

The figure excludes business at auto dealers, gas stations and restaurants. The results also exclude online sales, which according to research firm comScore Inc. were up 19 percent for the season overall. That's in line with its 20 percent forecast.

"Overall, we will pull off a pretty decent performance," said Michael P. Niemira, chief economist, who is sticking with his December forecast for a slim 1.5 percent gain in same-store sales, or sales at stores opened at least a year. That would mean same-stores sales in the November-December period would be up 2.5 percent from a year ago, though still below the 2.9 percent gain seen in 2006.

A clearer picture of how the holiday season fared won't be known until as late as Jan. 10, when the nation's retailers report their final December same-store sales figures.

Meanwhile, Karen MacDonald, spokeswoman at Taubman Centers Inc., which operates 24 malls in 11 states, said the "entire weekend" was strong and the malls on Monday were busy from the time they opened. Based on a spot check of malls, stores are recording low-single digit sales increases this holiday season, she said, but they're also looking to the week ahead when gift cards are redeemed.

Jerry Storch, chairman and chief executive at Toys "R" Us Inc., said the weekend was very strong.

"We were very pleased," he said, noting that business was "erratic but picked up at the end" of the season.

Shoppers who waited were rewarded with great deals.

Mark Pitney, 62, of Raleigh, who snapped up a red-and-white Christmas sweater discounted 60 percent at a local J.C. Penney's on Monday, said "without a doubt, there are a lot more markdowns this year."

Meanwhile, Susan Pirri, of Cranston, R.I., while shopping at the Providence Place Mall, stumbled on a pre-Christmas sale at clothing chain New York & Company that was offering 50 percent to 70 percent discounts. At that price, she couldn't help but purchase a belt, scarf and gloves for herself.

"I wasn't going to purchase things for myself," she said. "But at that price, it's hard to walk away."
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