Last-Minute Gift Buying Boosts Retailers
Procrastinators again gave retailers a last-minute present this holiday season, as sales in the week before Christmas rose 3.9% from a year earlier.
The International Council of Shopping Centers, reporting its tally of 69 chains nationwide, said Wednesday that sales volume and customer traffic accelerated in the seven days before the holiday.
With shoppers gravitating back to stores to return unwanted presents, snap up bargains and redeem gift cards, retailers could log another solid week, said Michael Niemira, the group’s chief economist.
Retailers are increasingly relying on the period immediately after Christmas as a “second season,” as one analyst puts it, in which to attract that potential audience, not just with discounted items but also with early-arriving spring fashions and other full-priced merchandise.
Despite the last-minute sales surge and hopes for post-Christmas shopping, analysts generally have been sticking with earlier projections for a moderate holiday shopping season.
Niemira, who Tuesday graded the season as a C-plus, still expects that sales at stores open at least a year -- a key gauge of a retailer’s growth -- will be up 3% to 3.5% for November and December.
Final figures for the season, which for some retailers account for 25% to 40% of their annual sales, are due next Thursday. Whether sales gains will filter down to the bottom line will not be known until retailers start posting their earnings reports in February.
There were other indicators Wednesday that shoppers were rallying as the holidays neared.
ShopperTrak RCT Corp. said sales at the malls and stores it tracks rose 25.5% last week from a year earlier. Unlike the findings of Niemira’s group, the ShopperTrak estimate was not adjusted to account for the extra weekend shopping day resulting from Christmas Eve falling on a Saturday.
Visa USA said retail sales on its credit and debit cards rose 21.4% to $13.1 billion in the seven days ending Sunday. Six of the holiday season’s 10 busiest shopping days fell in that week, Visa said.
With Christmas in the bank, many retailers moved to keep their momentum going.
Wal-Mart Stores Inc., for example, quickly yanked its Christmas signs and rearranged stores, moving clearance merchandise to separate sections to make way for fresh wares.
The new products include “wear now for spring” clothing heavy enough for December but offered in spring colors.
“We didn’t want to have shoppers come in after Christmas and be confronted with the same old stuff,” spokeswoman Gail Lavielle said.
Nordstrom said a catalog, to arrive in homes Jan. 11, would feature pale colors, delicate blouses and materials such as linen, cotton and silk.
Many retailers are stocking such merchandise earlier to get a jump on the second season, which stretches through January, said Marshal Cohen, chief industry analyst for NPD Group. Clothing that once arrived in late January or early February now may appear as early as mid-December, he said.
“January is no longer a throwaway month,” Cohen said.
But it has remained the weakest sales month of the year, accounting for just 6% of annual sales, said Niemira, who questioned the wisdom of stocking spring fashions early. He said shoppers increasingly preferred to buy clothes close to the time they will wear them.
January sales have benefited in recent years as gift cards have gained in popularity, Niemira said. His group’s surveys indicated that 60% of gift cards were redeemed by the end of January. Wal-Mart, for one, set up checkout lines on Christmas Eve solely for customers buying gift cards.
Some stores use themes to try to spark sales immediately after Christmas -- for example, pushing computer software and DVDs following strong sales of computers and disc players.
And they haul out products aimed at helping shoppers keep New Year’s resolutions, showcasing fitness equipment, athletic clothing and products to help consumers get organized.
“We look at January as the month when people pay attention to themselves,” Lavielle of Wal-Mart said.
Some retailers will no doubt just be glad to get 2005 behind them. Shoppers were erratic this year, and many postponed buying until the last minute. A surprising number of shoppers, as many as 6% in one survey, did not start buying presents until last week.
That was partly because Christmas Eve fell on Saturday for the first time since 1994, allowing for a late shopping blitz that included Friday, a day when many shoppers were off work.
ShopperTrak’s report indicated that it was the second-busiest shopping day of the season, after the Friday that followed Thanksgiving. Wal-Mart said last Friday was its busiest day of the year.
Other factors also helped boost sales as the season progressed, including a dramatic drop in gasoline prices that contributed to pumping consumers’ spirits.
Consumer confidence, which rebounded in November, rose again this month to its highest level since Hurricane Katrina struck the Gulf Coast, the Conference Board reported Wednesday. Factors included a resilient economy, job growth and lower pump prices.
