In a weak year for the U.S. economy, chain stores battle for holiday sales up to the last minute
By Cotten Timberlake and Chris Burritt
(Bloomberg)—U.S. retailers used extra promotions and extended hours to draw procrastinators and shoppers delayed by the East Coast snowstorm in the final stretch before Christmas.
Target Corp. (TGT) extended its hours to midnight Dec. 21 through yesterday. Borders Group Inc. (BGP), Wal-Mart Stores Inc. (WMT) and Toys "R" Us Inc. also kept stores open longer. Best Buy Co. (BBY) offered some DVDs for half off and Jos. A. Bank Clothiers Inc. (JOSB), a men's clothing chain, deepened discounts to at least 50 percent.
"We didn't intend to do everything, and now we're doing everything," Jos. A. Bank Chief Executive Officer Neal Black, 54, said Dec. 22 by telephone from the company's Hampstead, Maryland, headquarters. "We'll be slugging right down to the last minute."
Sales will be compressed into the final days before Christmas, said Marshal Cohen, chief industry analyst at NPD Group Inc. The snowstorm disrupted the Saturday before Dec. 25. Last year, that was the second-biggest shopping day after Black Friday, the day after U.S. Thanksgiving. Shoppers already had procrastinated more than in recent seasons.
"Retailers will pull out all the stops this week," Cohen said in a Dec. 21 Bloomberg Television interview. NPD is a Port Washington, New York-based market research firm.
The Washington-based National Retail Federation was holding to its forecast for a 1 percent drop in holiday sales, Ellen Davis, a spokeswoman, said Dec. 20. The International Council of Shopping Centers reiterated on Dec. 22 its forecast for a 2 percent increase in sales at stores open at least a year in December, after reporting that the storm slowed growth to 0.4 percent year over year in the week ended Dec. 19.
Jos. A. Bank cut prices of all clothing Dec. 21 and Dec. 22, after store visits slowed, Black said. The chain had planned to offer some of that merchandise at 40 percent and 30 percent off, he said.
The retailer's shares advanced 27 cents to $43.26 at 10:11 a.m. on the Nasdaq Stock Market. Target, based in Minneapolis, increased 20 cents to $49.05 in New York Stock Exchange composite trading. Borders, based in Ann Arbor, Michigan, declined 5 cents to $1.20. Bentonville, Arkansas-based Walmart climbed 28 cents to $53.60. Best Buy, based in Richfield, Minnesota, added 20 cents to $40.96.
Kathryn Greenberg, a 41-year-old Washington resident who works in philanthropy, said she lucked into some "fantastic" late discounts yesterday. She bought clothing for her children and other family members mostly at 60 percent off at a Gap (GPS) store as well as one of Gap Inc.'s Banana Republic stores.
Bigger Savings, More Buying
"I am spending the same as last year, but getting more," said Greenberg, who was carrying two bags and heading into Sephora, the cosmetics chain owned by Paris-based LVMH Moet Hennessy Louis Vuitton SA.
Walmart, the world's largest retailer, will keep most of its 803 discount stores and its Sam's Clubs open until 8 p.m. today, two hours later than last year, said John Simley, a spokesman. Amazon.com Inc. (AMZN) extended by one day, until Dec. 21, its cutoff for standard shipping.
Gap, based in San Francisco, increased 1 cent to $20.92 on the New York Stock Exchange yesterday. LVMH gained 44 cents to 77.90 euros in Paris trading. Seattle-based Amazon.com, the largest Internet retailer, dropped 19 cents to $138.75 on the Nasdaq.
East Coast Snow
Stores along the East Coast closed early during the Dec. 19 snowstorm. Twenty-four inches of snow fell on Bethesda, Maryland and 23.2 inches were recorded at Philadelphia International Airport, according to the National Weather Service.
Consumers had completed 72 percent of their holiday shopping through Dec. 20, down from 80 percent a year earlier, the New York-based ICSC said Dec. 22.
Historically, the 10 days before Christmas have made up as much as 40 percent of total holiday sales for November and December, according to Joseph Feldman, a managing director at Telsey Advisory Group in New York.
Sales fell 13 percent to $6.9 billion on the last Saturday before Christmas from the previous year, according to Chicago- based researcher ShopperTrak RCT Corp.
Some of lost sales did translate into online purchases. Sales at Web sites jumped 24 percent on Dec. 18 and Dec. 19 from a year ago, according to Coremetrics, a San Mateo, California- based marketing company.
Some impulse buying and so-called self-purchases, however, were irretrievably lost during the storm, Richard Jaffe, an analyst with Stifel Nicolaus & Co. in New York, said in a Bloomberg Radio interview on Dec. 22.
"It's not a delay, it's lost sales," Jaffe said. "You just don't recover that."
To contact the reporters on this story: Cotten Timberlake in Washington at firstname.lastname@example.org; Chris Burritt in Greensboro, North Carolina, at email@example.com.