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Holiday Sales Slump

Shoppers headed back to malls and stores on the day after Christmas as merchants slashed prices even further to clear out products from the holiday season and make way for spring goods. But even if sales are brisk this week, it probably won't be enough to save retailers from their worst shopping season in a decade.

"I didn't save any shopping," said Carol Baldwin, minutes before the doors were opening for the Macy's post-Christmas sale at 7 a.m. at the Colonie Center Mall, near Albany, N.Y. "I'm shopping for next year. You shop for next year and put it away."

"Everyone had such good sales before Christmas, it's different this year," said Sally Moore-Rafferty of Selkirk, N.Y. She was shopping for Christmas wrap and other holiday items for next year. They had been on sale at 50 percent off before, and Macy's advertised an additional 10 percent off.

Unwanted Gifts
Just what do people do with unwanted Christmas gifts?

Retail analyst Karen McDonald told CBS radio station WWJ-AM in Detroit that in a survey, just over 40 percent of the recipients said they return gifts they don't want. Another 26 percent said that they pretend they like the gift, but stash it away unused.

Eighteen percent said they use unwanted gifts even though they don't like them. Another 15 percent that said they recycle unwanted gifts, passing them on to someone else next year.

Outside the Target store in Cherry Hill, N.J., Janice Hirsch was among the few shoppers waiting for the store to open. Hirsch, a 35-year-old fitness instructor from Wake Forest, N.C., wanted to stock up on wrapping paper, bows and other holiday paraphernalia. She expected most of those items would be half-price.

Hirsch, who was surprised when she did not see a line, said it's important to get to the stores early in the day. "You've got to get the best stuff," she said.

A spokesman for the International Council of Shopping Centers said retailers saw only a one to two percent gain in holiday sales this year.

Michael Baker said stores usually get one third of their holiday revenue in the week before Christmas. But he said retailers didn't make their goal this time.

Baker said the warm weather in parts of the U.S. this fall is one reason for the slump. He said sweaters, scarves and mittens are token Christmas gifts that many people didn't need this year.

Baker said shoping patterns also took a turn on Sept. 11. He said the terror attacks reminded Americans about the importance of home and family.

With a disappointing pre-holiday shopping season behind them, retailers are setting their sights on the post-Christmas selling period, slashing already discounted prices even further to draw shoppers back to stores.

The seven days leading up to the New Year typically account for about 10 percent of total holiday sales, but this year those results were more important than usual. Merchants are hoping the deals attract enough business to compensate for otherwise dismal results.

"Retailers have to be concerned with getting their stores ready for the spring selling season, and they must sell everything by mid to late January — no matter what the cost," said C. Britt Beemer, chairman of America's Research Group, based in Charleston, S.C.

Beemer noted that retailers don't want to repeat the mistakes of a year ago, when they couldn't move merchandise fast enough. "A lot of retailers were still having clearance sales in February, and couldn't bring in their spring merchandise," he said.

Many stores had cut back on holiday inventories because of the slowdown, but those efforts weren't enough. As a result, many retailers began discounting early.

The markdowns intensified as Christmas approached, with some stores offering discounts on selected items at up to 75 percent off, typical of what customers would find during post-holiday sales. Some of the biggest sales were for sweaters, coats and other heavy winter apparel, whose demand was stymied by the warmer-than-usual weather.

Kurt Barnard, president of Barnard's Retail Trend Report, based in Upper Montclair, N.J. expects there will be even more "discounts galore."

He added, "There is no question that customers will enjoy extraordinary opportunities for extraordinary bargains."

© MMI, CBS Worldwide Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report

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