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The Honolulu Advertiser
Posted on: Friday, December 25, 2009

Retailers report sales surge


By ANNE D'INNOCENZIO
Associated Press

Hawaii news photo - The Honolulu Advertiser

Stores are counting on Christmas Eve shoppers like this one in Lakewood, Calif., for a better season than last year's disaster. The jury is still out, however, because the week after Christmas accounts for about 15 percent of holiday sales.

DAMIAN DOVARGANES | Associated Press

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SHOPPING SEASON AT A GLANCE

Key facts about this holiday shopping season:

SPENDING: Holiday shoppers have brought retailers a mildly positive season.

Spending through Dec. 19 is tracking a little below the 1.6 percent growth forecast by ShopperTrak, a research firm that monitors sales and traffic at more than 50,000 outlets. Sales had been in line with modest expectations but were derailed by the winter storm that slammed the East Coast this past weekend.

Stores planned on making up the sales loss in the final surge in the days before Christmas.

DISCOUNTS: Retailers offered lots of aggressive promotions heading into the season.

However, they didn't order nearly as much merchandise as last year, so they didn't have to cut prices drastically beyond what they had planned. Many shoppers with memories of last year were left waiting for 80 percent or 90 percent discounts that never came.

RETAILER PROFITS: Those low inventories should protect retailers' bottom lines, a big turnaround from last year's bleak holidays that led prominent sellers like Circuit City Stores Inc. into bankruptcy.

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NEW YORK — Shoppers appear to have given the nation's stores a needed last-minute sales surge.

Early readings from Toys R Us, Sears Holdings Corp. and several mall operators show packed stores on Christmas Eve following a busy week fueled by shoppers who delayed buying, waiting for bigger discounts that never came or were slowed by last weekend's big East Coast snowstorm.

Stores are counting on these stragglers in a season that so far appears slightly better than last year's disaster. The jury is still out, because the week after Christmas accounts for about 15 percent of sales as gift card-toting shoppers return to malls.

"The procrastinators were really out in force," said David Bassuk, managing director in the retail practice of AlixPartners, a global business advisory firm. "But I think retailers needed to be more aggressive to fight for those sales. A lot of people are still willing to hold out until after Christmas because the deals weren't as good."

A Christmas Eve snowstorm in the nation's heartland slowed some shoppers after snarling roads in the mountain states a day earlier.

At the Mall of America in Bloomington, Minn., shoppers were scarce and those who showed up had entire stores to themselves.

Steve Burns, 42, and his 15-year-old daughter, Amber, of Hastings, Minn., took advantage of the empty stores to browse for shirts and other last-minute gifts. Burns said the snow wasn't a problem and traffic was light because others stayed home.

"It doesn't bother me any," he said.

Some shoppers had challenges finding what they wanted as stores had slashed their inventories heading into the season. An Ann Taylor store at Westside Pavilion in West Los Angeles pulled in 33 cartons of January merchandise earlier than planned, according to Rebecca Stenholm, a company spokesman at the mall's operator, Macerich Co.

Joe Roberts, 59, left a RadioShack at a mall in Madison, Wis., with a huge smile and the PlayStation3 his teenage son insisted on for Christmas.

He said he delayed making the $300 purchase because of economic concerns. A self-employed designer of manufacturing equipment, Roberts is getting less business every year and his wife might soon lose her job as an office manager.

"I don't feel good about our outlook," he said.

Roberts said they none-theless decided Wednesday to grant their son's wish, but then learned the video-game system was sold out at Best Buy, Walmart and other stores. Roberts finally connected with RadioShack early yesterday and braved icy roads to buy the store's last one.

Snowy weather can take a toll on sales. Research firm ShopperTrak reported Saturday's snow helped fuel a 12.6 percent drop in sales Saturday compared with a year earlier.

Wally Brewster, a spokes-man at General Growth Properties, said merchants in his centers said they had made up for lost sales. Still, he expects overall holiday sales will be only about even with a year ago.

Caution remained. Karen MacDonald, spokeswoman for mall operator Taubman Centers Inc., said that stores said many shoppers, remembering the 80 percent to 90 percent clearance sales they found last year, were asking whether the discounts were going to get any deeper.

And Macerich's Stenholm said that more people were using cash to pay for gift cards than a year ago, reflecting tight credit and a desire to pay down debt.

The full picture won't be known until merchants report December sales Jan. 7. But most expect merchants' fourth-quarter profits should be intact because they didn't have to cut prices more than they'd planned as they were cushioned by lean inventories.

ShopperTrak is sticking to its prediction for a 1.6 percent gain, compared with a 5.9 percent drop a year ago.

The National Retail Federation expects that total retail sales will slip 1 percent, though some experts said that might be a bit too cautious. A year ago, they fell 3.4 percent by the trade group's calculations.

Those concerns were far from most shoppers' minds, though.

Otis Tyler got up early yesterday to take a 12-mile boat ride from his home on Smith Island in Maryland's Chesapeake Bay to buy his Christmas gifts. From there, he drove 40 minutes to The Centre at Salisbury, Md., hoping to pick up gift cards for his wife and daughter-in-law.

"I always like to do it on Christmas Eve," said Tyler, 60. "It's something I've been doing a long time. It's the hustle and bustle that I like."