New York – Procrastinators may have
saved retailers this holiday season with a last-minute shopping surge
that put merchants on track to meet their modest sales goals, two
reports confirmed Wednesday.
But retailers are also counting on a post-holiday sales boost from
customers returning to stores to redeem gift cards.
“Phase one at least met very modest expectations. It came late and it
was uneven,” said Michael P. Niemira, chief economist at the
International Council of Shopping Centers. “Now, we are in phase two,
which is taking on a different character. It could make a modest
Christmas into a much better Christmas.” A growing number of stores,
including Wal-Mart Stores Inc., Coach Inc. and teen retailer American
Eagle Outfitters Inc., rushed in fresh merchandise to boost the
post-holiday business, hoping that customers will snap up some bargains
and pick up some new merchandise. That could help boost fourth-quarter
profitability, particularly for many apparel stores, which have had to
discount heavily to lure customers.
Niemira estimated that about 60 percent of gift-card redemptions occur
between Dec. 26 and the end of January. Gift card sales are only
recorded when customers redeem them.
According to The International Council of Shopping Centers-UBS tally of
about 70 retailers, sales rose 2.8 percent for the week ended Saturday,
compared to the previous week, and climbed 3.9 percent compared to the
year-ago period.
The tally is based on sales at stores opened at least a year, known as
same-store sales.
Same-store sales for the month and for the November-December period are
on track to meet a modest gain of anywhere from 3.0 percent to 3.5
percent, compared to a year ago.
ShopperTrak RCT Corp., which tracks sales of more than 40,000
mall-based stores, reported that total sales for the week ended Saturday
rose 30.3 percent compared to the previous week, and were up 25.5
percent compared to the same year-ago period.
A better holiday picture will emerge next week when the nation’s
retailers report their December sales results.
Niemira believes that if more shoppers than expected redeem their gift
cards over the next week, it would add almost one percentage point to
the December results. How profitable retailers’ fourth-quarter period
will be, which ends late January, depends in part on how much bargain
buying and how much regular-price buying shoppers will do over the next
few weeks.
Burt Flickinger, managing director of consulting firm Strategic
Marketing, isn’t that hopeful.
“I think customers are just looking for the deeply discounted product,”
he said.
