Merchants needed a hefty sales surge this past weekend to recoup lost business after seeing a slow start to a holiday selling season that never gathered steam. Now, they'll have to rely even more heavily on the final days before Christmas and post-holiday sales to meet their holiday sales forecast.
"We are not getting the kind of lift we need. Traffic and sales were below expectations" on Saturday, said Michael P. Niemira, chief economist at the International Council of Shopping Centers. He serves as an adviser for ShopperTrak, which tallies sales results from 30,000 retail outlets.
Total sales were down 7 percent to $6.7 billion on Saturday, compared with the same Saturday in 2003, according to ShopperTrak. ShopperTrak will be releasing sales for the overall weekend later on Monday.
Niemira noted that luxury stores — which have enjoyed robust sales as their well-heeled customers have benefited from the economy's recovery — had the best performance. Stores like Sears, Roebuck and Co. and J.C. Penney Co. Inc. that catered to the mid- to-low income shoppers, who have pulled back on spending as they have been more vulnerable to higher heating costs and a volatile job market, attracted big crowds with deep discounts and expanded shopping hours.
What is hurting merchants is that there is no must-have item, except in consumer electronics — iPod music players and the PlayStation2 video game console, for example, have become difficult to find in many areas, according to Marshal Cohen, senior industry analyst at NPD Group Inc., a market research company based in Port Washington, N.Y.
The Saturday before Christmas is traditionally the busiest day of the year for merchants, though last year, the day after Thanksgiving stole that crown. However, the last weekend before Christmas could be losing its luster as there are more ways to shop for a holiday item.
The increased popularity in gift cards and online spending could be helping to skew the holiday sales figures. Gift cards are only recorded as sales when they are redeemed at the stores. Online sales, which are expected to increase 20 percent to 26 percent this holiday season, are not included in ShopperTrak's sales figures.
Another factor that probably dampened sales over the weekend is that the season is two days longer, tempting shoppers to delay their buying even later to get the better deals, according to Scott Krugman, a National Retail Federation spokesman.
Catrice Smith of New Orleans said she'll be out bargain shopping Christmas Eve just like she does every year. "That's when you get the slammin' sales," said Smith.
But procrastinating also carries risks — not being able to get a hot item like PlayStation2. "You can't find one anywhere in Charlotte," said Carol Strain, who was at the local SouthPark mall on Saturday. "I've called every Best Buy and Circuit City, and they're not to be found."
Wal-Mart Stores Inc., which had stepped up discounting after a disappointing start to the holiday season, reported on Saturday an uptick in general merchandise sales the week ended Friday, noting that sales of winter merchandise improved. Company officials reached late Sunday declined to say how sales fared over the weekend.
Sears reported "very good customer traffic," company spokesman Bill Masterson said.
Karen MacDonald, a spokeswoman at Taubman Centers Inc., which owns or manages 22 malls, said she was "pleased" with traffic and business, reporting that most stores surveyed were up a modest mid-single digits on average, based on a spot check of mall centers. Luxury stores did much better, with many upscale merchants reporting double-digit increases, she said.
Wally Brewster, senior vice president of General Growth Properties Inc., which operate 220 malls across the country, expects that sales over this past weekend will be up a modest 2 percent to 5 percent over a year ago. But he said that gift card sales should rise 20 to 25 percent this season over the year-ago period.
Despite the generous bargains in the stores, there was plenty of caution among shoppers in the malls.
Frankie Pumphrey of Oak Forest, Ill., who was at the Lenox Square Mall in Atlanta, said she will spend less than a year ago on holiday gifts, as she is on disability. She was buying a few items for her grandchildren.
"The money's just not there, and the cost of living is just so high," said Pumphrey, who was in Atlanta visiting her family. "The bare necessities take up all your money."
In fact, Laura Lancia of Fort Wayne, Ind., who was shopping at Circle Centre Mall in downtown Indianapolis on Friday, said that she still needed gifts for her children, but was planning to defer a big purchase — the Xbox or PlayStation2 — until January because those are items she needs to plan for.
"Santa can put an IOU under the tree," she said.