Counting on Bargain Hunters
Shoppers headed back into stores Friday as retailers hauled out their post-Christmas prices in hopes of squeezing more sales from what has been a lackluster holiday shopping season.
Stores cut prices by as much as 80% to lure consumers bearing gift cards and cash received as Christmas presents. They’re hoping to build on what several experts and some chains said was a last-minute buying binge that emerged in the days before Christmas.
Whether that translates into merriment in what is supposed to be the most lucrative quarter of the year for merchants remains to be seen. The news from retailing’s trenches Friday was generally upbeat.
Wal-Mart Stores Inc., the world’s biggest retailer, said sales picked up the two days before Christmas, but not enough to lift sales from the low end of its December forecast of a 3% to 5% improvement over last year. Wal-Mart shares rose 8 cents to $52.52 on the New York Stock Exchange.
San Francisco-based Sharper Image Corp., a purveyor of unusual gifts and gadgets, boosted its earnings projections for the fourth quarter and the year Friday after noting that its sales at stores open at least a year were up 21% this month compared with a year ago. Its shares, already up 86% this year, on Friday rose an additional 8%, or $2.42, to $32.39 on Nasdaq.
And Amazon.com Inc. said this holiday season was its busiest ever. The world’s largest Internet retailer is forecasting record fourth-quarter revenue and may have its first profitable year. Its shares rose 15 cents Friday to $53.47 on Nasdaq.
Indeed, investors seemed relieved by the news as many retail stocks posted gains during a shortened trading session. The Morgan Stanley index of 38 leading retailers, down 4.6% since Thanksgiving, increased 0.73% on Friday.
“Now the big question: What about the post-Christmas season?” said Michael Niemira, chief economist and research director for the International Council of Shopping Centers.
Last year, 22% of December’s sales were generated the last six days of the month, he said, with sales at stores open at least a year rising 1% for the full month, the slimmest increase in three decades.
This year’s last-minute surge was not enough to prompt Niemira to boost his prediction that sales would rise about 4% for November and December combined, compared with a 0.5% increase in the year-earlier period.
“If we get a surge this week, maybe we do get a stronger reading,” he said. “But it’s too uncertain at this point to say for sure.”
Some stores in California have been outperforming other retailers. At Sharper Image’s Newport Beach store, best sellers included the company’s massage chairs, which go for $699.95.
“On the 23rd ... we must have shipped 32 of them to get them there before Christmas,” said manager Peter Martin.
On Friday, many shoppers said they were hunting for bargains.
“This is stuff on sale,” said Ellen Brooks, a self-described “wealth coach” from North Tustin who helps clients manage their personal and business finances. Brooks bought two dressy jackets -- marked to $74 from $165 -- and a pair of pajamas for $70, half the original price, at Neiman Marcus’ Newport Beach store.
Riverside residents Mai and Quynh Do were scouring the Westminster Mall -- among others -- for deals.
In Orange County, “you’ve got more shopping malls, so you can run from one to the next faster,” Mai Do said, gathering bags full of silk flowers, stuffed animals and children’s clothing, all heavily discounted.
Sales of gift cards, expected to account for 8% to 10% of all purchases, have injected additional hope that final tallies will be larger than last year. Retailers don’t count sales from gift cards until they are redeemed.
Wal-Mart said Friday that its gift-card balances were more than 20% higher than a year ago.
