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The last big push
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December 21, 2000: 12:37 p.m. ET
Retailers hope last big weekend will ease the blow of disappointing sales
By Staff Writer John Chartier
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NEW YORK (CNNfn) - It's beginning to look a lot like ... big-time sales!
Heading into one of the biggest shopping weekends of the year, retailers are hoping to move inventory in the wake of what has been a disappointing holiday season as an economic slowdown and deep discounts take their toll on profitability.
Analysts are forecasting one of the lowest holiday shopping periods in years as consumers become more skittish in the face of a Fed-induced economic slowdown, high fuel and oil prices and margin-eating discounts, which make consumers happy, but retailers glum.
Click here for CNNfn.com's Special Report: Shopping for the Holidays
"So far the holiday season has been disappointing. We have had declines in each week of the holiday season this year compared to last year" Dana Telsey, a specialty retail analyst with Bear Stearns told CNNfn's "Ahead of the Curve," Thursday. "And going into this final weekend it certainly is important, as the last time Christmas was on a Monday, over 35 percent of sales occurred on the 18th to the 24th, when typically only 24 percent occurs so it certainly helps any increase we may get this season."
Already Sears (S: Research, Estimates), the nation's No. 2 retailer, is saying December sales at stores open at least a year, a closely watched figure known as same-store sales, will likely fall short of previous estimates for a low single-digit increase.
The Hoffman Estates, Ill.-based company has stuck to the game plan as far as promotions, but it plans to hand out $10 off gift certificates in a special early morning promotion this weekend, Spokeswoman Peggy Palter said. And Troy, Mich.-based Kmart (KM: Research, Estimates), the No. 3 retailer, began offering up to 70 percent discounts on some items Thursday.
Even Home Depot (HD: Research, Estimates) has joined the discount fray. The Atlanta-based home improvement retailer said Thursday it was offering customers 10 percent off most purchases made through Dec. 24. Wilkesboro, N.C.-based home chain Lowe's Cos. (LOW: Research, Estimates) matched its rival with a 10 percent discount of its own.
Also suffering from the spending slowdown is Wal-Mart (WMT: Research, Estimates). The No. 1 retailer has posted three consecutive weeks of below-plan sales and said it will provide final holiday sales reports on Tuesday.
Tom Williams, a spokesman for the Bentonville, Ark.-based chain, said the company hasn't changed its guidance on quarterly sales.
"This week, the whole key for us is to keep in stock when you expect your stores to be crowded," Williams said.
Merrill Lynch retail analyst Daniel Barry said he is expecting "the worst Christmas sales since the recession of 1990" with combined November/December sales up just 2.4 percent compared with 5 percent a year ago and 2.6 percent in 1990.
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We're seeing more layoffs and consumers are beginning to feel there's a cold winter breeze suddenly blowing their way.
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Kurt Barnard
President
Barnard's Retail Trend Report |
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Kurt Barnard, president of Barnard's Retail Trend Report in Upper Montclair, N.J., said he expects December same-store sales to be up about 3 percent when they are reported the first week of January. That's about half the 6.5 percent increase retailers reported in the same period a year ago.
"There's a general sense of weakness and caution and I'll tell you the headlines in the newspapers these days do not help," Barnard said. "We're seeing more layoffs and consumers are beginning to feel there's a cold winter breeze suddenly blowing their way."
The National Retail Federation reported Monday that mall traffic was down 9.6 percent last week and department store traffic was down 14.4 percent compared to last year, but noted that retail traffic increased last week compared to the previous week.
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 ONLINE SALES GROW
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Online retail sales are likely to grow 70 to 80 percent this holiday season, a significant expansion, but perhaps not enough to rescue troubled Internet commerce companies.
Click here for full story
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And the International Council of Shopping Centers says traffic is down 8.12 percent compared with a year ago. As Dec. 25 looms closer, that traffic is expected to become a jam with loads of last-minute shoppers.
"Traffic is just huge out there right now. The purchasing was so delayed first of all because of the extra two days before Christmas this year and secondly by weather, consumers don't have a choice now," said John Konarski, executive vice president of the International Council of Shopping Centers.
 Konarski said consumers could do more than one-third of all their holiday shopping this weekend. Even still, he believes overall holiday sales will come in flat compared to last year.
However, the outlook is not all bleak. Looking ahead to the first half of 2001, Barnard sees retailing settling down into a more sustainable base with merchants having nowhere to go but up.
"What we are suffering from is the slide from the exuberant high we had a year ago at a level that was completely unsustainable," Barnard said. "I will also tell you retailers are going to be up against far more favorable numbers, easier numbers."
But he cautioned that if the Fed decides to cut interest rates in January, it could take several months before the economy begins feeling the positive effects. 
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