Shoppers hold off as bargains abound
By Andria Cheng
Bloomberg News Service
PRINCETON, N.J. — U.S. retailers will keep up discounts and promotions this weekend as recession-wary holiday shoppers hold out for low prices on clothing, electronics and toys, analysts said.
Limited Inc.'s Express clothing chain at Quakerbridge Mall in Lawrenceville, N.J., is offering two $25 vouchers for every $50 that consumers spend. At Macy's Herald Square store in New York, customers get free gifts and bonuses.
While department stores kept inventories lean in an attempt to avoid steep markdowns, those plans may be dashed by further declines in consumer confidence, analysts said.
"They'd better keep adding to discounts because consumers expect it," said Britt Beemer, chairman of America's Research Group Ltd. "Fifty percent or higher is the magic number to turn them out."
U.S. retailers had their smallest same-store sales gain last week in five years, according to Bank of Tokyo-Mitsubishi Ltd. About 44 percent of consumers who shopped over the Thanksgiving weekend said they spent most of their money at discount stores, such as Wal-Mart or Target Corp., up from about 30 percent in the previous three years, according to an America's Research survey.
"I was looking for good discounts on electronics and found them at Wal-Mart," said Jen Sost, 30, a mother of three, who was shopping at Quakerbridge Mall. "I bought my son a Game Boy for $89. They were selling for $99 everywhere else."
May Department Stores Co.'s Lord & Taylor stores are advertising coats and jackets for 30 percent to 50 percent off, while boots are discounted by as much as 50 percent. Federated Department Stores Inc.'s Bloomingdale's stores are marking down designer handbags by as much as 40 percent until Dec. 24.
Same-store sales are expected to rise 4 percent in the November-December season, Bank of Tokyo economist Mike Niemira said. Sales for the two-month period last year increased 2.3 percent, the worst holiday showing since 1995.
Even with the discounts and promotions, sales this weekend probably will be smaller than last weekend, the post-Thanksgiving holiday period, as shoppers look more than spend, analysts said.
"It's worth it to walk around and compare prices before handing over your cash," said Amarilis Maldonado, 18, at Quakerbridge Mall.
Online retailers also are cutting prices or offering free shipping. Amazon.com Inc. offered free shipping for orders of more than $99 during the Thanksgiving weekend. At Cooking.com, shoppers are offered a $10 gift certificate with a $100 purchase.
Internet sales rose 27 percent to $1.48 billion in the first 10 days of the holiday season, according to BizRate.com Inc., which monitors transactions at 2,000 Web retailers.
Sales at U.S. stores open at least a year rose 2.3 percent last weekend from last year's three-day Thanksgiving holiday, according to TeleCheck Services Inc.
