NEW YORK – With Dec. 25 less than a week away, many stores are finding themselves in the perennial position of counting on procrastinators to meet their sales goals, despite early reports of solid sales this past weekend.
With some exceptions, stores have generally stuck to planned discounts throughout the holiday season, not buckling to pressures from shoppers who are waiting for the best deals. That's good news for retailers' fourth-quarter profits.
But it also makes it more nerve-racking as merchants wait for the big sales surge. After pulling in better-than-expected crowds on Black Friday, the start of the holiday shopping season, shoppers have been returning to stores at a slower-than-expected pace after a post-Thanksgiving lull.
Shoppers did shop early for certain hot toys such as Fisher-Price's T.M.X. Elmo and Sony's PlayStation3, and popular consumer electronics like flat-panel TVs. Pricey fashions and jewelry as well as status handbags have been hot too, but for most of the other merchandise, particularly apparel, consumers are dilly-dallying.
"The general consumer consensus is that they have time," said Kim Roffey, a strategist at Kurt Salmon Associates. "That's great for consumers, but nerve-racking for retailers."
With Christmas falling on a Monday, shoppers know they have a full weekend before the holiday. Merchants, however, still were hoping that shoppers would be a bit more motivated to buy as Hanukkah occurred earlier this year than last year.
"I shop for all of my gifts on Christmas Eve," said Theresa Watson, of Detroit, who was at Eastland Mall near Detroit. "I get up real early knowing that's what I'll be doing all day and then I wrap gifts all night. That's my tradition."
She added, "There's all kinds of deals. Everyone's trying to get rid of everything."
Chris Mahoney of Rotterdam, N.Y., who was at the Colonie Center Mall in Albany, N.Y., said: "I pretty much started my shopping last week."
Clearly, this holiday season, the nation's stores have made it easier for consumers to procrastinate with expanded hours and attractive deals in the final days. J.C. Penney Co. (JCP) had an 18-hour blowout sale on Saturday.
Meanwhile, Toys "R" Us aims to pull in procrastinators by having huge shipments delivered to stores this week of the hard-to-find toys. They include more than 65,000 T.M.X. Elmo units, more than 30,000 Fisher-Price's Kid Tough Digital Cameras and more than 6,000 Sony Inc.'s (SNE) PlayStation3 consoles.
Jerry Storch, chairman and chief executive of Toys "R" Us said that the toy seller is better stocked with the hottest toys in the final days before Christmas compared to years past.
"We made this an intense focus," he said. "We expect this week to be huge."
The retail industry is being forced to kowtow to consumers who are "shopping much smarter than they use to," said Craig R. Johnson, president of retail consulting firm Customer Growth Partners. "Unless it is an exclusive item or the supply is limited, they are not going to pay full price."
Jackie Vargas, from Trenton, said she was planning to finish her holiday shopping over this past weekend, after researching deals both online and offline.
"I did a lot of shopping online this year to avoid the crowds and see what online deals they had that department stores didn't have," she said.
Early reports of this past weekend were encouraging. Santa Monica, Calif.-based Macerich Co., which operates 80 malls nationwide, said that traffic was up 15 percent for the week ended Saturday compared to the previous week, according to Garry Butcher, vice president of research.
Karen MacDonald, spokeswoman at Taubman Centers, reported that a sampling of malls showed sales increases of anywhere from mid-single digits to low-double digits on Saturday, from the year-ago period. MacDonald noted, however, that stores were taking additional markdowns on winter items like snow boots and gloves amid mild temperatures.
Nevertheless, analysts say that the gap between the winners and losers is only widening.
The toy industry has been helped by a plethora of hot toys, giving analysts hopes that the industry will see sales declines reversed. Toys "R" Us's Storch said he has been "pleased with results."
Ernie Speranza, chief marketing officer at KB Toys, noted that traffic this weekend was up over a year ago, but said he expects KB to meet holiday sales goals by the end of January. "It is no longer a two-month period," he said.
The well-heeled shoppers, benefiting from a stock market rebound and big bonuses on Wall Street, have splurged on diamond necklaces and status handbags, helping to boost sales at such stores as Bergdorf Goodman and Saks Fifth Avenue.
For most other apparel sellers, shoppers are waiting for the best deals. Department stores such as Federated Department Stores Inc.'s (FD) Macy's and Bloomingdale's as well as J.C. Penney Co. Inc. are expected to have solid gains, benefiting from industry consolidation and better fashions. But the sales performance at mall-based apparel stores is mixed.
John Morris, managing director at Wachovia Securities, noted that discounting at the 18 mall-based apparel stores he tracks has been "contained," though some like struggling Gap Inc. are discounting heavily, while others like American Eagle Outfitters Inc. are not.
In addition to American Eagle, (AEOS) winners this holiday season include J. Crew Inc., Coach Inc. and Abercrombie & Fitch Co., according to Jennifer Black, president of Jennifer Black & Associates, an equity research firm. Those that seem to be having a challenging time include AnnTaylor Stores Corp. (ANN) and Chico's Fas Inc., she said.
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