Retailers aim to make up for weak sales with post-Christmas push
Deal-hungry shoppers headed back to the malls to buy what they didn’t get for Christmas, as retailers scrambled to woo buyers after weeks of lackluster sales during the crucial holiday season.
The post-Christmas rush is especially crucial this year for merchants who are hoping to make up for lost steam over the last few weeks. Analysts say the final week of 2012 may mean the difference between a cheery or disappointing holiday shopping season.
“We’re looking out for good sales — and to spend my girlfriend’s gift card,” Juan Perez, 25, a resident of downtown Los Angeles, said Wednesday. “We both have some time off today, so we thought, why not see if there are good prices?”
The construction worker said his girlfriend, Elizabeth Gomez, planned to spend most of the $50 Target gift card she had received from family for Christmas on new clothes for herself. “Maybe she’ll also buy me a shirt or something, if the price is right,” Perez said.
Just how the holiday season shapes up won’t be known for certain until after the new year. The National Retail Federation estimated that merchants would rake in $586.1 billion in holiday sales, up 4.1% from a year earlier. But there are increasing doubts that gains will be that high, and some shoppers said Wednesday that the after-Christmas deals were not all that hot.
New data released Wednesday raised worries that retailers might not hit the mark. For a two-month period ending Christmas Eve, sales of items including clothing and electronics rose a modest 0.7% compared with the same period last year, according to a report from MasterCard Advisors SpendingPulse. That was the worst performance since 2008.
“It’s only an early indicator, but it’s a good barometer that things are not as robust as people expected,” said Marshal Cohen, chief industry analyst at NPD Group. “There were a lot of distractions that added up week after week during the worst possible time for retailers.”
Cohen dropped his forecast for holiday season sales gains to 2.8% from above 3%. He said the looming “fiscal cliff” was a chief concern among shoppers, many of whom began sharply curtailing their spending after Congress went on break for the holidays without agreeing to a deal.
“Consumers are now wondering what 2013 will be like from a financial perspective,” he said. “It became about fulfilling obligations for the holiday season instead of impulse purchases.”
Despite all the distractions, many shoppers like Gomez and Perez were out scavenging for deals Wednesday while workers busily stocked shelves with party hats for New Year’s Eve and cards for Valentine’s Day.
At the Target store in West Hollywood, a long line of people waiting to snag post-Christmas bargains had formed before the doors opened at 7 a.m., said store manager Hilda Doushgounian.
“There’s a lot of kids using their gift cards in the toy and electronics departments,” she said. “There’s also a lot of people buying anything with Christmas motifs — food, gift sets, towels, anything that’s Christmas.”
The crowds were bigger at the Best Buy store at Westfield Culver City compared with last year, with many people exchanging presents for updated gadgets they actually want, said general manager Margie Kenney. Laptops were being exchanged for tablet computers and video games were returned for e-readers, she said.
“I expected today to be the slowest day, but we have lines in different departments,” she said. “It will be packed for the weekend as well.”
Even a good after-Christmas pickup will probably not entirely make up for ground lost before Dec. 25, analysts said.
After years of heavy discounts, bargain-hunting shoppers are holding out for discounts of 70% to 80% when most retailers are staunchly refusing to offer anything better than 50% off, said Britt Beemer, a retail expert at America’s Research Group.
“If there’s one thing to learn from Christmas this year, it’s that more and more consumers want deals, and they are willing to go into Christmas hibernation to wait,” Beemer said. In year’s past, merchants sometimes were willing to offer discounts of 70% to 80% to move merchandise, he said, “but retailers won’t go that far this year, and the consumers have figured this out and they are not happy about it.”
Storm Arreola, 22, of Los Angeles said he was not seeing many deals.
“Everything went back up to normal prices right away,” said the hot dog vendor shopping with friends. “But I’m still going to get a Nerf gun. A bunch of my nephews got them for Christmas, and now I want to get one to join in the fun.”
