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Shoppers find few deals in post-Christmas sales
Mariel DeBernard was ready to be wowed by the post-Christmas sales when she turned up at the Fashion Centre at Pentagon City mall in Arlington, Virginia. It wasn't to be.
- Bloomberg
- Published: 23:32 December 27, 2008
New York: Mariel DeBernard was ready to be wowed by the post-Christmas sales when she turned up at the Fashion Centre at Pentagon City mall in Arlington, Virginia. It wasn't to be.
"Normally I'd be loaded down with things, but there just aren't that many deals, particularly for clothing," DeBernard, a 40-year-old homemaker, said. "For most things, the prices aren't that different from before Christmas."
Retailers, which started offering discounts of 50 per cent or more weeks ago, had been counting on post-Christmas sales to help rescue what will probably be the worst holiday season in four decades. That's not going to happen, said Burt Flickinger, managing director of Strategic Resource Group, a retail-industry consulting firm in New York.
"This week isn't going to do it," Flickinger said in a Bloomberg Television interview.
"Consumers are more cash- and credit-constrained than ever before. After a 25-year spending tsunami, they've shifted from spending to savings."
Customer traffic at malls run by Taubman Centres was "light" early on Friday and picked up in the afternoon, said spokeswoman Karen Mac Donald. Taubman owns or manages 24 shopping centres in 11 states.
Advertising post-Christmas sales before the holiday, as retailers did this year, "really smacks a little bit of desperation," said Patricia Edwards, a retail analyst and the founder of Storehouse Partners.
Economic slump
Retailers count on the holiday season for as much as 35 per cent of annual sales. They're now scrambling for business as consumers retrench to cope with shrinking home and stock values, tightening credit and the highest unemployment rate in 15 years.
Discounts of 70 per cent off or more by Macy's, Ann-Taylor Stores and other retailers failed to prevent a spending drop of as much as four per cent during the last two months of 2008, according to data from SpendingPulse, owned by MasterCard Advisors. Including fuel, sales tumbled as much as eight per cent.
That's the steepest drop since it started tracking the data in 2002, said Michael McNamara, MasterCard Advisors vice president of research and analysis. He estimates sales, excluding autos and gasoline, fell two per cent to four per cent from November 1 to Dec-ember 24.
That projection follows forecasts of falling sales from industry trade groups. Sales at stores open at least a year may drop as much as two per cent in November and December, the International Council of Shopping Centres said on December 23. That would be the steepest decline since at least 1969.
"It is the worst kind of picture," Michael Niemira, chief economist for New York-based ICSC, said in a Bloomberg TV interview.
Retailers still have too much inventory, said Edwards.
Wal-Mart Stores, which started selling the iPhone on Friday, is one of the country's few retailers still boosting sales. The discounter is one of two companies on the 30-member Dow Jones Industrial Average with shares gaining this year.
Meg McGuire, a county health inspector in Eden, North Carolina, spent a third of the $1,200 she and her husband had budgeted for the holiday on bicycles, toys and other discounted items at Wal-Mart on Black Friday, as the day after the US Thanksgiving holiday in November is known.
The couple decided to not buy each other Christmas gifts for the first time in their 11 years of marriage. "A lot of people are concerned about their jobs," said McGuire, 30.
More than a dozen retailers, including electronics chain Circuit City Stores, have sought bankruptcy protection this year as the credit squeeze and the US recession drained sales.
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