More coal in stores’ stockings
Call it a Black-and-Blue Friday.
On the day after Christmas, retailers once again rolled out the early-bird deals and unprecedented discounts, with some touting their bargains as the best of the year.
But mall traffic remained significantly lower than in past years, according to retail professionals who monitor shopping center activity, and shoppers who did turn out said they continued to spend thriftily.
For the nation’s retailers, the year’s final shopping frenzy was tempered by news that weeks of price cutting and other drastic efforts to drive sales weren’t enough to salvage the holiday shopping season.
Retail sales fell 5.5% in November and 8% in December through Christmas Eve compared with a year earlier, according to data tracker SpendingPulse. Excluding gasoline, overall sales were down 2% to 4%. Many categories, including apparel, luxury goods and electronics, registered double-digit declines.
“Overall, it was one of the more challenging seasons the country has seen in quite some time,” said Michael McNamara, vice president of research and analysis for SpendingPulse, a unit of MasterCard Advisors. “The sectors that did a little better, the winners this year, were anyone that sold nondiscretionary items: food, healthcare, drugstores, as well as industry sectors that relied on price thresholds of under $500.”
Luxury sales suffered the largest declines, despite desperate efforts by such high-end retailers as Saks Fifth Avenue, which slashed prices by as much as 70% in recent weeks. Luxury sales from Nov. 1 through Dec. 24 fell 34% over the same period last year; excluding jewelry, sales declined 21%.
Another big-ticket category, electronics and appliances, also had a difficult season, with a decline of 26%. Items priced at more than $1,000 did especially poorly, McNamara said.
This year’s holiday period was marked by a dramatic shift in the way consumers shopped for gifts. Many opted to buy essentials such as supermarket gift cards and household items and kept their usual holiday splurges to a minimum.
Surrounded by giant sale signs at the Beverly Center in Los Angeles on Friday, Diego Diment said it was the first time he visited a mall since mid-November. The voice-over artist said he spent about $300 on gifts this year, down from $500 last year.
“Everybody was spending less,” he said. “I didn’t want to overspend.”
At the Third Street Promenade in Santa Monica, Glenn Eisen said he spent less on holiday gifts because he lost half the value of his stock portfolio when the market plummeted. Then there are the two houses he owns in New Jersey and Virginia, which he hasn’t been able to sell since he moved to Los Angeles a year ago.
He’ll buy something if his family needs it, he said, but that’s it.
“It’s more about necessity than discretionary spending,” Eisen, a marketing professional, said.
So not surprisingly, sectors that sell food, such as grocery and general merchandise stores, helped keep total sales declines in the single-digit range, according to SpendingPulse’s report.
Although the bulk of the shopping season is over, the week after Christmas has become increasingly important for retail chains over the last few years as consumers enjoy time off work and rush to redeem gift cards.
Some of the post-holiday specials included bargains of as much as 60% off top name-brand toys at Toys R Us stores and 40% off select already-reduced items at Neiman Marcus.
JCPenney held its “biggest after-Christmas sale ever” with more than 100 “door busters” from 5:30 a.m. to 1 p.m. Friday, twice as many as last year. And for the first time, the department store chain also offered customers a 5:30 a.m. wake-up call.
But many of the deals still weren’t appealing enough, said Marshal Cohen, chief industry analyst at market research firm NPD Group Inc. Cohen and his staff visited more than two dozen shopping centers around the country Friday and said mall traffic levels were down about 20% from last year.
“This is not the good weekend that the retailers were really hoping to get,” Cohen said. “It proves that they’ve tapped [shoppers] out.”
Promises of big bargains lured Mark Johnson to Westfield Century City early Friday, but he said he was disappointed with what was being offered. He ended up buying a silk shirt with an embroidered palm tree on the back from Macy’s for $138, the full price.
Although Johnson, a housing developer from Santa Rosa, Calif., is watching his budget carefully these days, he said he was still confident that the economy would turn around.
“The market’s a little soft right now, but we have a new president,” he said. “Things are going to get better.”
Retail experts are doubtful, with many predicting a wave of store closings next year. A number of well-known chains have already sought bankruptcy protection in recent months, including KB Toys Inc., Circuit City Stores Inc. and Mervyn’s.
In the coming months, “it’s going to become something of a fashion to file for bankruptcy,” Cohen said.
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alana.semuels@latimes.com
