NEW YORK – Looking at their worst shopping season in a decade, stores slashed prices even further after Christmas — but those deep discounts weren't enough to draw shoppers.
Some retailers offered discounts as steep as 80 percent.
Macy's post-Christmas sales blitz includes 50 percent discounts on furs, men's suits and sportswear, and men's sweaters. Toys R Us was offering discounts of up to 80 percent. Carson, Pirie, Scott offered markdowns ranging from 25 percent on Tommy Hilfiger handbags to 75 percent off on some women's apparel. Carson's is a unit of Saks Holdings Inc.
But those head-spinning rebates mostly drew thin crowds and few lines at registers.
"I don't see a lot of people buying things," Daina Giesler said while shopping in Carson's on Chicago's State Street.
Even where stores had shoppers, however, the shoppers weren't necessarily spending money.
As of 4 p.m. at Taubman's Westfarms mall in Farmington, Connecticut, 25 percent or less of the business was from people returning items for a refund, 25 percent was exchanges for other items and 50 was new business. But of that new business, 50 percent of new business was from gift certificates.
"It's too little, too late,'' said Michael P. Niemira, vice president of Bank of Tokyo-Mitsubishi Ltd. He said he expects an anemic average gain of 1.5 percent to 2 percent in holiday season sales, compared with last year's, for the 88 stores he tracks. That's in line with his forecast, reduced earlier in the season, and is the poorest performance since at least 1990, when the increase was 2 percent.
TeleCheck Services Inc., a check approval service, reported Wednesday that holiday sales paid for by check rose 2.2 percent nationwide over the year-ago period. Checks account for about a third of retail spending and remain second to cash as the most popular method of payment.
And sales don't equal profits, which Niemira believes could be down as much as 10 percent, weaker than the 5 percent decline he had anticipated.
That means many retail companies will be focusing on shutting down some stores and finding other ways to cut costs next year.
Not every store was slow — many Old Navy stores offering 50 percent off some merchandise had long lines. Gap Inc.'s Old Navy offered T-shirts for $1.99 and heavy jackets for $6.99.
Also, Wal-Mart said Wednesday that it expects holiday season sales gains at stores open for at least a year will likely be at the high end of its expected 4 percent to 6 percent forecast.
Wal-Mart said it would limit post-Christmas discounts because seasonal goods sold so well.
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 recoup some of the sales lost earlier in the season. They also need to make room for spring goods, which start coming in at the end of the month.
But even if sales turn around late in the week, it probably won't be enough to save retailers from their worst shopping season in a decade.
"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, sales of which were slow because of 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.''
Reuters and the Associated Press contributed to this report.