Retailers described steady traffic on the day after Christmas as shoppers scooped up discounted items that previous sales hadn’t cleared out.
But steady might be the new “busy” during what some expect to end up as the worst holiday retail season in four decades.
“People are out and about and visiting stores, but compared to last year they are not putting as much cash on the barrelhead,” said Christopher Howes, president of the Colorado Retail Council, a trade group that represents more than 2,000 retail locations.
“There is no sugarcoating it. It was a terrible year,” he said.
Angela Baier, marketing director at Cherry Creek Shopping Center, called traffic at the high-end mall steady, similar to how John Jackson, a sales manager at American Furniture Warehouse in Douglas County, described things.
“There were primarily purchases or exchanges and very little returning of items,” she said.
A manager at a Target store in Aurora said Friday that traffic and sales are “almost exactly like it was a year ago.”
Target annually slashes all its Christmas inventory by 50 percent on the day after Christmas.
“Consumers are definitely out and about and soaking up the deals and still in the holiday mode,” said Jennifer Waymire, director of marketing at the Aurora Town Center. “It seems like almost every retailer in the mall is offering some sort of deep discounts.”
Rachael Shyne, a personal shopper who works with clients in Colorado and California, said she is seeing bargains she never imagined possible, especially at specialty clothing stores not known for big discounts.
“It is the best time of year to scoop up things that are out of your reach,” she advised. “It is definitely a time to get some key pieces. Buy the best you can afford.”
If the economy continues to slow, then low-volume, higher- end items likely will become scarcer and some of the boutique stores selling them may not survive.
“Chaotic” at REI store
Also, retailers going forward will better match their inventories with demand, reducing the need for profit-eating discounts in the future.
In short, buy that cashmere sweater at 70 percent off rather than those $10 T-shirts, Shyne advises.
Some stores and malls described strong traffic, while one retail expert said he hardly saw any shoppers at Streets at Southglenn and nearby stores, who had their shelves depleted by pre-Christmas sales.
The morning started slow, but things got “chaotic” right before lunch with gift returns and shoppers, said Dick Everline, operations manager at REI’s Denver flagship store.
Pam Schenck, general manager of Park Meadows mall, said people were lined up at Crate & Barrel before the store opened, and J.C. Penney reported that it was having its best after-Christmas morning ever.
“We’re seeing a lot of bags,” Schenck said. “We seem to be about 95 percent capacity based on the parking lot.”
Diana Nelson, owner of Cherry Creek toy store Kazoo & Co., reported steady traffic from buyers redeeming gift cards and taking advantage of half-off on Hanukkah and Christmas items.
Hoping for better year
But she, like many retailers, was looking forward to next year, hoping for better days.
“We are trying to wrap up our year,” she said. “The new year is a fresh start.”
Online sales have become a bigger part of the Cherry Creek retailers’ revenues. And overall, online retailers appear to have fared better than brick-and-mortar stores this season.
on Friday reported its highest-volume holiday season ever, although it didn’t disclose what kind of discounts were needed to win those sales.
Holiday sales account for 30 percent to 50 percent of annual sales for most retailers. And of that holiday total, about 14 percent comes during the last week of December, according to America’s Research Group, a market research firm in Charleston, S.C.
Several reports indicate that the 2008 holiday retail season could end up being the worst one in decades.
Gift-card sales drop
SpendingPulse, a unit of MasterCard Advisors, estimates that retail sales were off 5.5 percent in November compared with a year ago and were down 8 percent this month.
Subtract auto and gasoline sales, and retail sales likely fell 2 percent to 4 percent between Nov. 1 to Dec. 24, SpendingPulse estimates.
That lines up with the 2 percent decline at stores open a year or more that the International Council of Shopping Centers estimates this season will bring. The showing would be the worst since 1969.
Merchandise returns and shoppers cashing in gift cards help drive post-Christmas retail traffic.
But the bankruptcy of more than a dozen retailers this year, including Circuit City and Linens-N-Things, reduced gift- card sales.
“Gift cards are down by a third, and that will impact shopping levels,” said Britt Beemer of America’s Research Group, who predicts weak day-after-Christmas sales.
Beemer said he’s also heard from parents who said if their kids didn’t love their gifts, they were taking them back to find something else.
“There will be a lot more returns,” he said. “A lot of consumers out there aren’t going to spend any more money than they have to.”
