Stores Full, But Retailers Anxious

Retailers remained anxious Sunday, after the last full weekend of shopping before Christmas appeared robust but not spectacular, despite generous bargains for many goods.

The retail industry, which had an uneven start to the holiday season and has seen disappointing crowds at the malls since, was hoping for a big sales bonanza. But with lean inventories and the final critical days still yet to come, stores are not panicking.

Again, merchants are relying on procrastinators during the final days before Christmas and post-holiday sales, expected to be boosted by the redemption of gift cards.

"This was a healthy weekend, but it wasn't something to knock your socks off," said Marshal Cohen, chief analyst at NPD Group Inc., a market research company based in Port Washington, N.Y. "But stores aren't panicking because the season has more time to go. The trickiness of the season is that consumers are calling the shots on where they were going shopping."

On Chicago's Miracle Mile shopping district Saturday, 29-year-old attorney Stacey Fahrner was just getting started.

"This is actually early for me," said Fahrner as she scanned the directory at Water Tower Place, clutching an American Girl and Lord & Taylor bag. "It's not because the deals are now. I'm just lazy," she said.

But her procrastination might have paid off: She picked up two pair of pearl earrings at Lord & Taylor for $150, or 60 percent off. One is a gift for her mother; the other she says she'll keep for herself.

The winners and losers this weekend were the same ones throughout the season. Discounters and electronics stores drew in the most crowds, while mall-based apparel stores were a mixed bag, Cohen said. Luxury stores did well, though he believes their sales gains aren't as robust as a year ago.

Wal-Mart Stores Inc., the world's largest retailer, said Saturday that December sales growth is still on track to be up anywhere from 2 percent to 4 percent. But it noted that food sales continue to outpace general merchandise sales. That may not bode well for profits, as food carries thin profit margins.

Karen MacDonald, a spokeswoman at the Taubman Centers Inc., which operates or owns 23 malls in 11 states, estimated that business and traffic were up in the mid-single digits this past weekend. She estimated that luxury stores enjoyed double-digit sales increases.

Tracey Gotsis, senior vice president of marketing at Santa Monica, Calif.-based Macerich Co., which operates 80 malls nationwide, noted that early estimates showed that strong traffic for the weekend made up for the shortfall earlier in the season.

Analysts expect this past Saturday to be the busiest for storeowners this season, but given this year's quirky calendar, it could lose some luster. This year, Christmas Eve falls on a Saturday, the first time since 1994, and Hanukkah is also later than usual, starting Dec. 25. Those factors will accentuate last-minute shopping, said Michael P. Niemira, chief economist at the International Council of Shopping Centers.

Booming gift card sales and robust online sales are also helping to skew sales figures. Gift cards, again a big winner this holiday season, are only recorded as sales when recipients redeem them.

According to comScore Networks Inc., non-travel online spending during the first 46 days of the holiday season, ended Dec. 16 totaled $15.86 billion, up 23 percent from the corresponding year-ago period. The gain is still shy of the 24 percent growth forecast for the season.

Nevertheless, analysts have been worried about disappointing business at the mall, a sign that shoppers are frugal amid high energy costs, though they have fallen in recent weeks.

According to the most recent data from ShopperTrak RCT Corp., which tracks sales at more than 40,000 stores, predominantly in malls, average weekly sales for December fell 9 percent through Dec. 10.

"I did more shopping this year in drugstores and small stores like that rather than department stores," said Sharon McKinley of Baltimore, who was at Mondawmin Mall in Baltimore.

She noted that higher gasoline prices and heating costs played a factor.

"I found out I had to pay more for gas and electric. It made a difference," she said.

Amid a challenging economy, stores offered more generous discounts from the start of the season than a year ago, but most bargains have been planned, according to Tamara Pattison, vice president of products for Cairo.com, an online shopping resource that helps consumers track deals locally.

J.C. Penney Co. Inc., which opened its doors for 17 hours straight on Saturday, offered up to 60 percent off on merchandise. At Macy's Herald Square, sweaters were marked half off.