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Bargain bonanza for shoppers
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December 26, 2001: 4:23 p.m. ET
Last-minute shopping helps holiday sales, but December still looks dismal.
By John Chartier
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NEW YORK (CNN/Money) - Retail sales surged in the final days before Christmas as skittish consumers who waited until the last minute to buy gifts crowded the nation's stores, helping to improve an otherwise dismal outlook for the holiday season, a report said Wednesday.
The figures are the first overall glimpse at just how the nation's retailers fared in what so far has proved to be a disappointing holiday shopping season. Discount chains are expected to report stronger results than traditional department stores and specialty shops. That's because consumers have turned increasingly cautious all year as they swallowed news of corporate layoffs by the hundreds of thousands and the Sept. 11 terrorist attacks.
"It looks like sales really happened in the last few days, following a pattern we've seen in the last few years," A.G. Edwards retail analyst Bob Buchanan told CNNfn's Market Call Wednesday. I think that turned a weak month of December into a more respectable month of December." (WAV 437KB) (AIFF 437KB)
Check acceptance company TeleCheck said sales in the long weekend before Christmas pushed its survey of check purchases at 27,000 locations nationwide to a gain of 2.2 percent compared with the same period a year ago.
That's up 0.4 percent point from its survey of the first 24 days of the holiday season, which showed a gain of 1.8 percent.
Chain store sales surged 2.9 percent for the week ended Dec. 22, a huge upswing from the 0.5 percent decline recorded the previous week -- evidence that shoppers waited until the last possible minute to finish their holiday shopping, according to the latest weekly report from the Bank of Tokyo Mitsubishi and UBS Warburg.
That surge is likely to cause total December sales to come in about 1 percent higher compared with a year ago, which is better than some forecasts for a flat-to-lower sales figure in the month.
Wal-Mart Stores Inc. (WMT: up $1.02 to $58.15, Research, Estimates) was the first discount chain out of the gate Wednesday, saying its holiday sales for the period between Thanksgiving and Christmas Eve came in above company expectations, with customers snapping up electronics, apparel and seasonal holiday items.
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Retailers report final holiday sales tallies Wednesday as shoppers head out to take advantage of big post-Christmas discounts. (CNN/Money) | |
Wal-Mart, the world's biggest retailer, said sales gains at stores open at least a year, a closely watched gauge known as same-store sales, were in the upper mid-single-digit range for the holiday season. The Bentonville, Ark.-based chain also said total December same-store sales are tracking at the upper end of the company's forecasts for a 4 percent to 6 percent increase from a year ago. Previously, Wal-Mart said it anticipated December sales at the lower end of that range.
Kmart Corp., (KM: up $0.04 to $5.19, Research, Estimates) the No. 2 U.S. retailer, said its holiday sales came in at the lower end of its expectations for a flat to 2 percent increase for the period between Nov. 22 and Dec. 26.
In a pre-recorded call Wednesday, Troy, Mich.-based Kmart cited reductions in the number of pages in its newspaper advertising circulars for part of the shortfall. The company saw sales traffic build closer to Christmas, with apparel posting a sales gain for the first time in two months, thanks to the return of more seasonable weather.
Online sales appeared to fare better than sales at real-world stores, as evidenced by Internet portal Yahoo!'s (YHOO: up $0.84 to $17.51, Research, Estimates) announcement Wednesday that shoppers spent $10.3 billion through its shopping platform in the fourth quarter, with sales volume increasing more than 86 percent between Thanksgiving and Christmas Eve compared with a year ago.
The figures come as Americans were expected to crowd the nation's shopping malls and stores Wednesday to take advantage of huge discounts brought on by a shaky economy and sluggish holiday shopping period. Still, stores may not be as crowded as merchants would like, major sales notwithstanding.
Most of the nation's retailers are expected to release final tallies on holiday sales Wednesday that are widely expected to come in at their lowest levels in a decade.
Merchants are resorting to drastically sharp discounts, hoping to draw shoppers into the stores to clean out merchandise that would prove costly to retailers if they can't get rid of it.
Sears, Roebuck & Co. spokeswoman Jan Drummond said the chain was offering early morning specials Wednesday and other promotions in which shoppers could take as much as 85 percent off certain items. The company is also offering zero-percent financing on all appliances over $399.
On Monday, Sears said sales through Dec. 22 were on track for a low-to-mid single-digit increase for December. Sales for the entire holiday period won't be available until next week.
"What proportion of the shopping was going to be done in the last few days before Christmas is anyone's guess," Drummond said.
This year has proved an unusually rocky one for retailers, as they leaned more heavily on discounts to lure shoppers who have turned skittish over job worries and an economic recession helped along by the terrorist attacks.
Many consumers turned to discount chains like Wal-Mart and Target Corp. (TGT: up $0.42 to $38.46, Research, Estimates), hunting for bargains and everyday items instead of looking for those big-ticket items generally available at traditional department stores such as Macy's and Bloomingdale's parent Federated Department Stores Inc. (FD: up $0.73 to $39.25, Research, Estimates) and Lord & Taylor parent May Department Stores (MAY: up $0.36 to $36.22, Research, Estimates).
Unseasonably warm weather also hurt retailers this year, particularly apparel merchants, who had trouble moving winter clothing.
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Many retailers reacted early in the year and sharply curbed merchandise orders for the holidays to avoid last year's mistake, in which they were stuck with mountains of inventory when sales fell short of expectations.
However, no one counted on the terrorist attacks, which pushed consumer spending even lower, forcing retailers to scramble for a new game plan. Holiday sales have proven to be disappointing and most retailers are expected to offer enormous after-Christmas discounts of up to 80 percent in some cases.
Though that may boost sales, such big discounts hurt retailers' profits by cutting into their margins. 
From staff and wire reports
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