Consumers Temper Holiday Spending
Consumers Temper Holiday Spending in What Should Be Christmas' Biggest Shopping Weekend
By ANNE D'INNOCENZIO
AP Business Writer
NEW YORK (AP) -- In what was supposed to be the biggest shopping weekend of the season, consumers remained frugal as they flocked to the nation's stores Saturday and Sunday, despite heavy discounting and advertising blitzes.
The restrained spending in the final stretch before Christmas wasn't the manic frenzy merchants had hoped for and cast a further pall on the shopping season, already expected to be the worst in at least a decade.
``This is supposed to be the ultimate peak Christmas shopping weekend and I think it was even softer than Thanksgiving weekend,'' said C. Britt Beemer, chairman of the Charleston, S.C.-based America's Research Group.
Instead of the typical surge on the final weekend before Christmas, traffic and sales were up only slightly from the previous weekend, analysts said, and down from the same time a year ago.
As a result, holiday sales and profits for many merchants may come in below already modest expectations, said Jeff Feiner, managing director of Lehman Brothers, Sunday.
``The profit picture looks a lot worse. Traffic was still off for the most important weekend before Christmas, even with the rampant discounts,'' Feiner said.
Retailers' profits may now be down as much as 5 percent to 10 percent, worse than the 3 percent to 5 percent declines Feiner had expected.
Feiner said his holiday forecast of a 2-percent gain in sales for the 22 stores he tracks, may now be ``a little too optimistic.''
Robert Mood, who does a daily workout at the Mall of America in Minneapolis, Minn., noticed thin crowds Saturday, typically the biggest the day of the holiday shopping season.
``There's a lot more room to move around,'' he said.
The disappointing turnout this weekend is the latest blow to retailers, which have been suffering from sluggish sales since the shopping season began the day after Thanksgiving.
The only bright spots have been in consumer electronics like game consoles and DVD players, kitchenware and certain toys like Harry Potter products. Value-oriented chains, particularly Wal-Mart Stores Inc., have fared much better than department stores and apparel specialty stores.
The holiday season had five full weekends and was 32 days long, a day longer than 2000, but many shoppers held back because of unseasonably warm weather, worries about job security, or lingering concerns about the Sept. 11 terrorist attacks.
That left many retailers pinning their hopes for a bigger increase during the final seven days of shopping before Christmas.
The share of holiday sales generated in that period spiked to 30.9 percent last year, which was a record and a big jump from 23.9 percent in 1999, according to the International Council of Shopping Centers.
But Beemer said that's not likely to happen again this year. He expected the share to drop to about 20 percent.
``This Christmas is more about people than buying gifts,'' Beemer said. ``Even many of those that didn't finish their Christmas shopping by this weekend have stopped. They just want to be home with their families.''
Marilyn Villano, 48, from Auburn, N.Y., used to procrastinate when it came to buying holiday gifts. This year, however, she finished shopping by Dec. 10.
``I just wanted to spend more time with my children and grandchildren,'' she said.
Many merchants were counting on procrastinators, including Kmart Corp., which kept the doors of its stores open from 6 a.m. Thursday through 8 p.m. Christmas Eve, or 110 hours. Last year, the Detroit-based retailer kept its doors open for 66 hours straight.
Bloomingdale's, hoping to snag procrastinators, sent out an extra catalog to more than 1 million homes last week.
Bloomingdale's chairman Michael Gould said he was pleased with the overall weekend's sales receipts, though revenues at its New York store were below expected. Overall, holiday sales should be ``fractionally above'' its modest goals, he said.
But others, particularly those that sell luxury items, weren't as fortunate.
Holly Nelson, manager of Watch Station International Shop in Seattle's Westlake Center mall, said business was ``horrible.''
The shop had hoped to sell $3,000 worth of merchandise on Saturday, but had sold just $500 worth of merchandise by early Saturday afternoon.
Karen MacDonald, spokeswoman at Bloomfield Hills, Mich.-based The Taubman Centers, which operates 31 malls around the country, said retailers that featured big promotions garnered the most shoppers.
She said traffic at a sample of mall centers was down from a year ago, but said there were plenty of inconsistencies among merchants.
In fact, the prospect of such deep bargains made Diane Shaw, 40, from Topeka, Kansas, to hold off until the last minute to buy Christmas gifts.
``The things in the stores now are cheaper than they were in the ads two or three weeks ago,'' said Shaw, who was at the Crown Center mall in Kansas City, Mo.
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