Retailers Slash Prices Again
Retailers Struggling With Disappointing Sales Slash Their Prices Further
By ANNE D'INNOCENZIO
AP Business Writer
NEW YORK (AP) -- With less than eight days left until Christmas, retailers struggling with disappointing sales slashed their prices further this past weekend, but their efforts might not be enough to help some make their sales goals.
``They're desperately trying to move out merchandise, but they are not doing so successfully,'' Kurt Barnard, president of Barnard's Retail Trend Report, said. ``This is the home stretch, and they are whipping the horse, but the horse is responding only sluggishly.''
Despite the abundance of bargains, many shoppers -- nervous about job security and political uncertainties -- were reluctant to splurge.
``I am spending less, just buying toys for my friends' children,'' said Judy Boudreau, from Jupiter, Fla., who was at Macy's in New York. ``I have to be more conservative, given what has happened to my investment portfolio.''
Lana Wienberg, shopping in Denver, said her family was forgoing some holiday spending to visit relatives in St. Louis.
``I guess we've re-evaluated,'' Wienberg said. ``We're spending more money on travel and less on gifts.''
For retailers, the disappointments of the season keep growing.
The Thanksgiving shopping weekend, while solid, failed to give merchants the relief they were hoping for. And sales have been limping along since then. Sales at 80 of the nation's regional malls have declined 3.2 percent, from Nov. 23 through Dec. 9, according to the International Council of Shopping Centers. The results, however, don't include sales at department stores and other mall anchors.
Wal-Mart Stores Inc. said Monday that for the seven days ended Friday sales at stores open at least a year were ``slightly below'' the company's sales projections for both Wal-Mart stores and Sam's Clubs. Same-store sales are considered the best indicator of a retailer's health.
The world's largest discounter said that its December sales are still on track to meet its forecast for a 4 percent to 6 percent gain.
Kmart Corp. said that its same-store sales during the seven-day period ended Wednesday were slighly below expectations, following a pattern for the month. However, the retailer said it still feels comfortable that it will be able to meet its December forecast of no more than a 2 percent gain because 45 percent of its December sales come from the last 10 days before Christmas.
Federated Department Stores, which operates such department stores as Macy's and Bloomingdale's, said Monday that sales for the seven-day period ended Saturday, were weaker. However, it maintained that same-store sales will still meet its modest projections of 11 percent to 14 percent declines from a year ago.
At K-B Toys, which operates 1,400 stores, the weekend's sales were up only in the low single digits from a year ago.
``We were hoping for better,'' said spokesman John Reilly, noting that sales of game consoles and game software were strong, but toys sales were unchanged from a year ago.
``Certainly, the direction is less than retailers would have liked, especially given all the bargains,'' said Jeff Feiner, managing director of Lehman Brothers. He expects same-store sales for the 22 stores he follows will be up 2 percent, the worst since 1991. However, the results will be helped by discounters like Wal-Mart.
The Washington, D.C.-based National Retail Federation predicts total holiday retail sales, which excludes restaurant and auto sales, will rise in the range of 2.5 percent to 3 percent, to roughly $206 billion. That would make it the worst retail performance since 1990, when sales were basically unchanged.
Feiner fears that heavy discounting this past weekend will only further erode retailers' profit margins.
Struggling Gap Inc. took even more aggressive markdowns to move out its merchandise, ranging from crocheted scarves that had retailed for $28 and were now $9.99, to lambswool and angora-blended sweaters that had dropped from $78 to $39.99.
At Saks Fifth Avenue's New York flagship there were racks of designer merchandise discounted by as much as 40 percent.
At Macy's New York store, consumers swarmed over piles of discounted handbags and sweaters. For some items that were marked down twice, consumers were able to shave off 80 percent off the original price. For example, a twice-reduced Charter Club wool and polyester blazer, with the original price of $139, could now be bought for $27.80.
``I'm spending less this year because there are a lot more bargains,'' said Laura Manning, from Medford, N.Y., who has almost completed her holiday shopping.
``You're really getting more for your money,'' she said. ``I got sweaters that were 60 percent off for my sons in stores on Long Island. They're giving it away.''
Nancy Hellerstein, shopping in Denver, said the abundance of deals are luring her back to the malls.
``I'm one of these people who tries to do things early and I do, but at the last minute I think, 'That's a really good sale, I'll just go get one more thing,''' she said, while shopping the sale racks at Sears.
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