The gifts may be unwrapped, but the holiday season is hardly over for merchants who are seeing a larger portion of holiday retail sales shifting into January.
The continued popularity of gift cards has resulted in retailers’ booking a bigger portion of their holiday revenue in the days after Christmas. Accounting rules prevent merchants from recording gift card sales as income until they are redeemed.
“After-Christmas sales are becoming just as important, if not more important, than the sales made days before Christmas,” said Nick LeMasters, general manager of the Cherry Creek Shopping Center in Denver. Sales of Cherry Creek mall gift cards are up 20 percent from last year, he said.
The shift has largely been fueled by shoppers like Danette Anderson of Denver.
The 42-year-old dietitian was shopping early last week at the Cherry Creek mall. She toted only a few bags but said she had made significant progress on her gift list.
“I’m buying a lot of gift cards this year,” she said.
Nationally, gift card sales are expected to reach $24.8 billion, a $6.3 billion increase from 2005. Separate data from Consumer Reports show that gift cards were the second most popular gift after apparel this holiday season.
Some 40 percent of gift cards are redeemed in January, according to research firm Bain & Co.
Locally, the blizzard was expected to add an extra bump to gift card sales, as shoppers who were shut out of malls for two days sought ways to complete their shopping lists as quickly as possible.
Gift cards are often an extra boon to retailers because shoppers who receive them spend more than the card’s value when picking out their gifts.
“January has actually come to be considered a part of the holiday season because of gift cards,” said Hugh Crawford, general manager of the FlatIron Crossing mall in Broomfield. The center annually does $3.5 million in mall gift card sales. Of that, $1.5 million worth are sold between Thanksgiving and Christmas.
Between 1995 and 2005, January’s share of holiday sales grew from 21.8 to 24.8 percent. That 3 percent gain represents approximately $10 billion, according to Bain & Co.
The shift has prompted some forecasting firms, including Deloitte Research, to start including January in their holiday spending forecasts.
The National Retail Federation continues to define holiday spending as that conducted in November and December. Spokesman Scott Krugman says the group would like to include sales that occur in the first week of January in its calculations but cannot because the data are only provided on a monthly basis.
The return of gift-card-bearing shoppers is also prompting retailers to bring out new, full-price merchandise in the days after Christmas, which were traditionally devoted to clearance sales of holiday merchandise.
“Customers are coming in ready to shop,” said Krugman of the National Retail Federation. “While apparel retailers are focusing on clearing out holiday merchandise, they’re also bringing in new merchandise.”
Krugman said the trend became apparent last year. Although still in its early stages, it is expected to grow in the coming years.
Staff writer Kristi Arellano can be reached at 303-954-1902 or karellano@denverpost.com.
