HOLI-DAZE SHOPPING
It’s shaping up to be another nail-biter of a Christmas for retailers.
Holiday sales have been lackluster thus far, raising the question of whether they’ll recover during the final days of the season. At the heart of the matter is whether shoppers are procrastinating, waiting for last-minute discounts, or worse: clamping down on spending because they’re skittish about the housing crisis and the price of gasoline.
The latest data is fueling the anxiety. Retail sales across the US fell 0.4 percent last week from year-ago levels, according to ShopperTrak.
Customer traffic plunged nearly 9 percent as “winter storms throughout the Midwest and Northeast continued to wreak havoc this holiday season,” said Bill Martin, the Chicago-based research firm’s co-founder.
On the flip side, bad weather can create pent-up demand. While rain and snowstorms have kept many shoppers inside of late, they’ll be forced to brave the elements this Saturday, which many industry watchers expect will be the biggest shopping day of the year.
“We’ll have to see a real surge in shopping over the next several days,” to meet initial forecasts for the season, said Kamalesh Rao, director of economic research for MasterCard Advisors. “But I still think people will try to go out and spend – this is what you save your money for.”
Rao expects retail sales, excluding autos, will surge at least 4.5 percent this year. While that would fall slightly short of last year’s gain, it’s in line with those seen during the past few years. Rao thinks much of the recent weakness has been weather-related.
In addition, retailers increasingly have been hawking gift cards, which aren’t counted as sales until they’re redeemed. That’s pushing more sales into the week after Christmas, and making January an ever-bigger shopping month.
When it comes to procrastinating, the biggest culprits are men. As of this week, one in five had yet to begin their Christmas shopping, according to a survey by the National Retail Federation. At 35 million, shoppers who hadn’t started their Christmas shopping outnumbered those who had finished by 40 percent.
Yet women’s apparel – a key niche in retailing – has been a notable weak spot this season, with sales down nearly 6 percent during the first half of the season, according to MasterCard. By comparison, men’s apparel sales were up 4.5 percent, according to the study.
“Cashmere and luxury fabrics have done well,” and that’s a trend that tends to favor men’s wear, said Kathy Deane, president of Tobe, a global fashion consultant.
Meanwhile, hot electronics – from flat-screen TVs to iPods to GPS devices – “have been stealing the thunder” from women’s apparel this Christmas, Deane said.
A stumbling economy and lackluster fashion trends this season may also be playing a role, said Keith Fulsher, chief merchant at middle-market women’s clothier Dress Barn.
Still, “it’s too early to say the season’s a disappointment,” Fulsher said. “Customer patterns have changed – you really have to get through those couple of weeks after Christmas before you make a determination.”