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Retail Season Brightens In 11th Hour

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By ANNE D'INNOCENZIO, The Associated Press

Published: December 25, 2007

NEW YORK - Just weeks ago, the holiday shopping season seemed headed for disaster. But in the waning hours before Christmas, the nation's retailers got their wish - a last-minute surge of shopping that helped meet their modest sales goals, according to data released late Monday by research firm ShopperTrak RCT Corp.

And with post-Christmas shopping to come, some malls and stores were downright optimistic.

While consumers jammed stores at the start of the season in search of discounts and hot items such as Nintendo Co.'s Wii game console, a challenging economy prompted them to hold out until the end for bigger discounts.

An extra full weekend before Christmas also caused shoppers to procrastinate. In fact, Christmas Eve is expected to be a bigger shopping day than in past years because many employers gave workers the day off, with the holiday falling on Tuesday.

"I'm trying to get some deals, seeing what they got out. The sales are better later on. And the stores aren't so packed right now," said Tina Fields, who was at the Circle Centre Mall in Indianapolis early Monday. Her best bargain was a shirt from Aeropostale she bought for $5. Others such as Alex Allen of Boston had postponed shopping because of lack of time.

"I've been working a lot," said Allen, who took advantage of the 7 a.m. opening at a Target store to get toys for his three grandchildren before the largest crowds came.

The spree defied fears that a deepening housing slump, escalating credit crisis and higher gas and food prices would turn shoppers into Grinches - even in the end. Meanwhile, with the season plagued by a slew of Chinese-made toy recalls that began in the summer, there were concerns shoppers would boycott those products. That didn't happen either.

More Flock To Wal-Mart

Still, financial concerns clearly affected how consumers behaved throughout the season, forcing more to trade down to discounters such as Wal-Mart, according to Fred Crawford, managing director at restructuring firm Alix Partners. That trend hurt midprice apparel department stores such as Macy's and JCPenney, which have been aggressive with discounts and other come-ons. Ultra luxury stores are expected to fare well, Crawford said.

Toy sales are expected, at best, to match business from a year ago.

"This year, all I'm shopping for are the kids - no adults," said Chevy Edwards of Raleigh, N.C., who was picking through discounted children's clothing at a local JCPenney store.

Betting On Gift Cards For Boost

Those stores that didn't meet pre-Christmas goals are now even more dependent on the post-holiday season, which is becoming more important with the increasing popularity of gift cards. Card sales are expected to hit $26.3 billion in the November-December period, up 42 percent from two years ago, according to the National Retail Federation.

According to ShopperTrak RCT Corp., the week ended Dec. 31 accounts for about 16 percent of holiday sales. Stores don't record the card sales until shoppers redeem them.

ShopperTrak said late Monday that total sales on Saturday reached $9.36 billion, up a robust 7.6 percent from $8.7 billion on the same day a year ago. That surge will put stores on track to at least meet its forecast of a 3.6 percent sales gain for the season, according to ShopperTrak.

For the Friday through Sunday period, total retail sales soared 18.7 percent from the year-earlier period, though the increase was inflated because Christmas Eve fell on a Sunday a year ago, according to ShopperTrak. Dollar figures were not available for this past weekend.

Scott Krugman, a spokesman at NRF, noted that the season is turning out as expected: The final days before Christmas and the week after Christmas "determine the holiday season."

He expects total holiday sales will meet NRF's growth forecast of 4 percent. That's still below the 4.6 percent growth last year and the 4.8 percent average over the past decade.

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