Thursday, December 27, 2012
Associated Press
Bargain-hungry Americans will need to go on a post-Christmas spending binge to salvage this holiday shopping season.
Despite the huge discounts and other incentives that stores offered leading up to Christmas, U.S. holiday sales so far this year have been the weakest since 2008, when the nation was in a deep recession.
So stores now are depending on the days after Christmas to make up lost ground: The final week of December can account for about 15 percent of the month’s sales, and the day after Christmas is typically one of the biggest shopping days of the year.
Stores, which typically don’t talk about their plans for sales and other promotions during the season, are known for offering discounts of up to 70 percent in the days after Christmas. This year, they’re hoping to lure more bargain hunters who held off on shopping because they wanted to get the best deals of the season.
The Macy’s location in Herald Square in New York was bustling with shoppers Wednesday. There was a variety of deals throughout the store: candy dispensers for 70 percent off, various men’s clothing items for “buy one get one free,” belts for 50 percent off, a bin of ties for $9.99.
Ulises Guzman, 30, a social worker, was shopping in the store. He said he held off buying until the final days before Christmas, knowing that the deals would get better as stores got more desperate. He said he was expecting discounts of at least 50 percent.
The strategy worked. He saw a coat he wanted at Banana Republic for $200 in the days before Christmas but decided to hold off on making a purchase; on Wednesday, he got it for $80.
“I’m not looking at anything that’s original price,” he said.
Holiday sales are a crucial indicator of the economy’s strength. November and December account for up to 40 percent of annual revenue for many retailers.
So far, sales of electronics, clothing, jewelry and home goods in the two months before Christmas increased 0.7 percent compared with last year, according to the MasterCard Advisors SpendingPulse report. That was the weakest holiday performance since 2008 when sales dropped sharply.
Kathy Grannis,a spokeswoman at The National Retail Federation, the nation’s largest retail-trade group, said Wednesday the trade group is sticking to its forecast for sales in the November and December period to be up 4.1 percent to $586.1 billion this year. That’s more than a percentage point lower than the growth in each of the past two years, and the smallest increase since 2009 when sales were up just 0.3 percent.
Grannis noted that the trade group’s definition of holiday sales also includes food and building supplies.