Holiday shoppers enjoy bigger sales
NEW YORK - The Associated Press
Sale signs are displayed at a Target store in Colma, California. Big retailers, from Best Buy to Target to Toys R Us, are engaging in a price war this holiday. AP photoAmerican shoppers who waited until the final days before Christmas were rewarded with big bargains and thinner crowds. But their strategic deal hunting reflects why stores may not ring up the sales they want for the season.
Although fresh data on the holiday shopping season won’t be out until Christmas, analysts expect growth from last year to be relatively modest. Several factors have dampened shoppers’ spirits, including fears that the economy could fall off the “fiscal cliff,” triggering tax increases and spending cuts early next year.
On Christmas Eve, Taubman Centers, which operates 28 malls across the U.S., reported a “very strong weekend,” with shoppers taking advantage of all the sales. But many last-minute shoppers across the nation in cities such as New York, Atlanta and Indianapolis said they were spending less than they did last year and taking advantage of big discounts ranging from 30 to 70 percent off.
Kris Betzold, 40, was out at the Fashion Mall at Keystone in Indianapolis on Monday looking for deals on toys, and said she’s noticed the sales are “even better now than they were at Thanksgiving.” But she said the economy has prompted her and her husband to be more frugal this year.
“We under budgeted ourselves by $400 for Christmas because we just wanted to put that money back in savings,” she said.
Dianne Ashford, 40, who works for a film production company and was at the Lenox Square Mall in Atlanta, said on Dec. 24 that she was spending $500 on gifts this year, down from the $1,000 she normally spends.
Waiting for further sales
Other last-minute shoppers said they were holding off as much as possible for even bigger post-holiday sales.
That’s grim news for retailers, with many counting on the holiday shopping season for as much as 40 percent of their annual sales. Although the week after Christmas is considered part of the season as well, by that time retailers are backed into a corner since it’s their last chance to get rid of items that have been sitting on shelves for months. The steep discounts during that time mean sales are less profitable.
ShopperTrak, which counts foot traffic and its own proprietary sales numbers from 40,000 retail outlets across the U.S., last week cut its forecast for holiday spending down to 2.5 percent growth to $257.7 billion, from prior expectations of a 3.3 percent rise.
Online, sales rose just 8.4 percent to $48 billion from Oct. 28 through Dec. 22, according to a measure by MasterCard Advisors’ SpendingPulse. That is below the online sales growth of between 15 to 17 percent seen in the prior 18-month period, according to the data service.