Shoppers find few post-Christmas discounts
The post-Christmas rush was on at malls and other retail venues, but many shoppers right away noticed something missing: the huge discounts that made end-of-holiday sales so alluring in recent years.
“Beside the ‘buy one, get one free’ special for dress shirts, it’s the same percent off that Macy’s always seems to have,” Alfonso Hernandez of Norwalk said Sunday morning as he left the Los Cerritos Center in Cerritos with only a pair of bluejeans.
At the Jos. A. Bank men’s clothing store in Huntington Beach, items such as underwear and socks that were on a “buy one, get two free” special last week were regularly priced Sunday.
It was bad news for shoppers but a good sign for retailers.
The scarcity of blow-out deals was the result of better-than-expected traffic during the gift-buying season, experts said. Also, stores had carefully managed their inventories so they would not be stuck with scads of goods that they would have to sell off at deep discounts.
“Retailers were prepared,” said Jackie Fernandez, a retail specialist at the Deloitte accounting firm. “They put out what they wanted to sell and promoted it. Pretty quickly now you will be seeing the spring apparel and Valentine’s Day promotions.”
Such planning kept stores from falling into “panic mode” the day after Christmas, said Hana Ben-Shabat, a partner in the retail practice at management consulting firm A.T. Kearney.
“The deals are very moderate. You will see 30% to 40% off, but it will be selective, and not on a big assortment,” Ben-Shabat said.
Maria Martin, a shopper who hit the Los Cerritos mall early Sunday, feared that the markdowns would not be as steep as in years past.
Last week, “the lines were big even though the sales were not as good,” the Cypress restaurant owner said. Martin paid full price for an iPod Nano music player at the Apple store and then went in search of a deal on a pair of boots at Nordstrom.
Seattle-based Nordstrom Inc. said its regular-price business was stronger this year than last, leading to less discounting in the post-Christmas week.
“Our inventories are lean,” said Pamela Lopez, a Nordstrom spokeswoman.
But sale gains before Christmas were uneven. Fernandez said luxury retailers did better than some mid-range and discount stores.
That trend seemed to play out at JCPenney Co., the middle-market retailer headquartered in Plano, Texas. The Penney store in Northridge closed Christmas Eve with about the same level of inventory as last year, said Stephanie Contreras, the store’s manager.
The store plans to go into full “clearance” mode Monday but is short on children’s clothing, she said.
While people were turning out at the malls in California, heavy snow and bad weather on much of the East Coast slowed down shopping the day after Christmas, which traditionally is when unwanted gifts are returned in high volume and gift cards redeemed.
Nonetheless, “retailers are probably very happy with the way the holiday turned out,” Fernandez said.
When the numbers are compiled through the end of this week, sales will have risen about 3%, making this one of the best Christmas sales seasons in years, Ben-Shabat said.
After adjusting for inflation, seasonal sales might even have reached their pre-recession level, said Michael Dart, head of private equity at Kurt Salmon Associates, a retail industry consulting firm. Fernandez said there was some indication that sales might have nudged past 2007 levels.
Online sales were on fire, rising 15% to 17% compared with last year’s holiday season, Ben-Shabat said.
MasterCard Advisors’ SpendingPulse, which tracts sales nationally, said that from Oct. 31 to Dec. 24, U.S. consumers spent an estimated $36.4 billion — up 15.4% from the same period last year. Daily online sales surpassed $1 billion on six days in this year’s holiday season, compared with three days in last year’s.
Although retailers’ focus on disciplined pricing and careful inventory control will pay off in greater profits, analysts were not sure whether the robust nature of the retail season would continue into next year.
“You can’t take this as a signal that the consumer is back spending freely again,” Dart said, adding that retailers still have too many stores for the level of consumer demand.
Dart said continued tight credit and consumers’ focus on paying down debt during 2011 would keep people from spending at the levels they demonstrated during the Christmas season.
Martin, the restaurant owner, is trying to buck that trend. Before Christmas she told her family that they should go out and spend because it would create economic growth.
“People can’t hold on to all their money,” Martin said. “That’s not good.”
