Retailers lure holiday shoppers with deals
By Anne D'Innocenzio
Associated Press
Early-bird specials on TVs and DVD players and hot toys such as Bratz and Barbies drew bargain hunters to the nation's malls and stores before dawn yesterday, ushering in the holiday shopping season.
With the economy on the rebound and consumer confidence on the rise, merchants such as Sears, Roebuck and Co., office supplies retailer Staples, K B Toys and several major mall operators reported that traffic and business as of yesterday afternoon were at least as healthy as a year ago.
Some retail executives said they were heartened that shoppers were buying regular-priced goods as well — a stark difference from last year, when consumers stuck to bargain items.
Wal-Mart Stores Inc., the world's largest retailer, said stores were busy yesterday but a spokesman declined to give details.
The big question is whether consumers will keep spending throughout the season. Last year, merchants reported strong Thanksgiving weekend sales, only to see consumers retrench, delaying the rest of their buying until the very end of the season to get the best bargains. That resulted in mediocre holiday sales overall.
"Sales and traffic on Friday are better than last year, and that's encouraging," said Walter Loeb, an analyst with Loeb Associates in New York, who had talked with store executives yesterday. "There will be a slight slowdown, but in general I think the momentum will be better than a year ago."
When the doors of a Wal-Mart store in Marietta, Ga., opened at 6 a.m., hundreds of people jammed inside, some losing their shoes, others running at full speed with their carts to stake a claim to discounted items.
"It was an adrenaline rush," said Imbia Barry of Marietta, who lost her scarf in the crowd.
Barry, who arrived at 3:30 a.m., bought two HP Pavilion desktop computers with 17-inch monitors for $498 apiece, one for her grandmother and one for her daughter. She said they normally cost about $800. She also picked up a DVD player for her daughter for $29.96.
About 500 people stood in line early yesterday outside a Best Buy in Coralville, Iowa. Bargains included $299 digital camcorders and $999.99 high-definition, flat-screen TV monitors.
Matt Van Berkum of North English, Iowa, said he had been there since 3 a.m. and planned to buy a home theater system for his apartment for about $500. "I've never done this before but I'm hoping to get a good deal," he said.
At the K B Toy store at the King of Prussia mall in the Philadelphia area, Rogeline Jean, 23, of Philadelphia, was toting two pairs of giant green electronic Hulk Hands and two train sets for her 5-year-old twin sons.
"At first, I was just grabbing stuff. It was overwhelming," Jean said. She and her two friends spent $700 total in the K B Toy store, and each was dragging four giant bags toward their SUV in the parking lot.
Merchants expect the 2003 holiday season will be better than a year ago, but how much better remains the question.
Consumer confidence up
In 2002, uncertainty over the prospect of war in Iraq and a spate of corporate layoffs spooked consumers. This year, the economy is on the rebound, with employment improving. Consumer confidence is also on rise.
In fact, some retailers — particularly department stores and apparel merchants such as Bloomingdale's and Bergdorf Goodman — plan to be stingier with markdowns than in the past, a strategy many analysts don't think will last. But merchants are counting on consumers to be so pleased with new services and exclusive merchandise that they'll be willing to pay full price.
Karen MacDonald, a spokeswoman at Bloomfield Hills, Mich.-based Taubman Centers, which owns or manages 31 shopping centers in 13 states, said that sales and traffic were better than a year ago and that there was "plenty of full-price selling."
Wally Brewster, a spokesman at General Growth Properties, which owns and manages 166 malls in 39 states, said business yesterday was running in the high single-digit increases ahead of a year ago.
Still, many problems still beleaguer the industry. In particular, while the labor market is improving, the unemployment rate is still at 6 percent.
"We're going to have a good Christmas. It just won't be extravagant," said Sally Sanchez, 47, of Lakewood, Colo., who was shopping at a local Kmart. She said she is cutting back this year after being out of work for seven months.
Sales gain expected
Stores worried about having too many holiday leftovers have entered the season with inventories that average 7 percent below last year's levels, Michael Niemira, vice president of Bank of Tokyo-Mitsubishi Ltd., forecasts a sales gain of 4.5 percent for the November-December period, the best performance since 1999, when the tally rose 5.4 percent. He based the estimate on sales from stores open at least a year, considered the best indicator of a retailer's health.
Last holiday season's results were unchanged from 2001.
The Washington-based National Retail Federation projects total holiday sales to rise 5.7 percent to $217.4 billion.
It was clear that plenty of consumers have figured out how to get the most out of their dollar.
Duane Carbine of Phoenix spent less than an hour inside a Toys "R" Us store yesterday and came out with a shopping cart brimming with toys for his three children.
"I have planned this very strategically," he said. "Price was a significant factor."
Carbine, who did most of his shopping online last night and is getting his orders shipped for free, said he's on a strict budget and is eyeing the sales.
"I've probably just saved $400. You just have to," he said.
"By doing it this way, I've saved a car payment. That's how I look at it."
