AFTER-CHRISTMAS SHOPPING Retailers slash prices to prolong buying season
Luxury stores and online businesses did much better than expected.
NEW YORK (AP) -- The nation's retailers ushered in the post-Christmas shopping season Tuesday by slashing prices even more on holiday items and stocking up on full-price merchandise.
With the 2006 pre-Christmas season falling short of sales expectations for many merchants, the retail industry hoped that shoppers, armed with gift cards, would spend freely in the weeks ahead on discounted items as well as fresh merchandise. That will help boost business in December and in the fourth quarter.
The big exceptions were luxury stores and the online businesses, both of which did better than expected this holiday season. Meanwhile, deep discounting of flat-panel TVs and other gadgets led to a buying surge, as well as a profit blow to Best Buy and Circuit City Stores.
Federated Department Stores' Macy's opened its doors at 7 a.m. Tuesday and offered discounts ranging from 50 percent to 75 percent. Toys "R" Us offered 50 percent discounts on selected toys.
Merchants "are going to use all 31 days in December" and the month of January, said Marshal Cohen, chief analyst at NPD Group, a market research company in Port Washington, N.Y.
Shoppers appeared to be focusing on discounted holiday items Tuesday. Stores aim to clear out holiday leftovers soon to make room for the fresh merchandise -- including new winter items as well as early spring fashions.
What happened
After a stronger-than-expected turnout Black Friday, the day after Thanksgiving, stores struggled through the first two weeks of December as consumers returned to malls and stores at a disappointing pace. Stores did get a late-buying surge in the final days of the pre-Christmas season, but it was not strong enough to meet holiday sales goals.
A big negative factor this season was mild temperatures throughout most of the country, which depressed sales of winter items such as coats and snow boots.
Based on data released late Sunday by ShopperTrak RCT, sales for both Friday and Saturday generated a combined 16.2 billion, with Saturday's business totaling 8.72 billion. But Bill Martin, co-founder of ShopperTrak, said he had expected the finale to be stronger; because it wasn't, stores need a good post-Christmas season to meet ShopperTrak's 5 percent holiday forecast.
Online spending from Nov. 1 through Wednesday reached 21.68 billion, a 26 percent increase compared with 2005, according to ComScore Networks, an Internet research company. The results exclude travel, auctions and corporate purchases. That was better than the 24 percent rise in online spending that ComScore had expected.
'Best ever' for Amazon.com
Amazon.com reported Tuesday that the season finished as its "best ever," with the busiest day being Dec. 11. Among the best-selling items were Apple's MacBook 13.3 inch Notebook PC, books such as "On a Diet: The Owner's Manual for Waist Management" by Mehmet C. Oz and Michael F. Roizen; and toys such as Laugh and Learn Cuddly Learning Puppy.
Yahoo! Shopping reported Tuesday that its holiday season beat internal forecasts. It said that the number of shoppers to the site rose 24 percent in December compared to the year-earlier period. Traffic to merchants rose 30 percent in the past month, compared to the year-earlier period.
The post-Christmas season has become more important with the increasing popularity of gift cards. Gift card sales are only recorded on retailers' balance sheet when cards are redeemed.
According to BigResearch, which conducted a poll for the National Retail Federation, consumers are expected to spend a total of 24.81 billion on gift cards this holiday season, up from 18.48 billion last year.