IBJNews

Bargain hunters divided holiday shopping season

Back to TopCommentsE-mailPrintBookmark and Share

The holiday shopping season turned out to be two seasons: the Black Friday binge and a last-minute surge before Christmas.

Together, they added up to decent sales gains for most retailers. And the doldrums in between showed how shoppers have learned to wait for the discounts they know will come.

"The days that the American consumer gets excited about 25 percent off are over," said C. Britt Beemer, chairman of America's Research Group. "Shoppers are keeping their eye on the ball for the big sales events."

In November, spending rose 4.1 percent. And from Dec. 1 to Dec. 24, it rose 4.7 percent compared with the same period last year, according to research firm ShopperTrak. A 4-percent increase is considered a healthy season.

The higher sales are good news for the economy, because they show shoppers were willing to fund a holiday splurge despite high unemployment and other lingering economic woes. Consumer spending, including major items such as health care, accounts for 70 percent of the economy.

Still, plenty of people are pinched for cash in the slow economic recovery, and they were seeking the best deals, which could squeeze stores' profits for the fourth quarter, says Hana Ben-Shabat, a partner in the retail practice of A.T. Kearney, a management consulting firm.

Stores have trained even shoppers who are primed to spend to look for a discount.

Heading into the season, stores were nervous that shoppers would be tight-fisted. Many officially opened the season with discounts on TVs and toys that started as early as Thanksgiving Day. Consumers came out in droves, resulting in record spending.

Then the frenzy tapered off. A mild winter and the fact that Christmas fell on a Sunday encouraged people to wait until the last minute and accentuated the peaks and valleys of spending.

Stores started to push more discounts to get shoppers to spend in the finale. In fact, retailers' promotional e-mails from Sunday, Dec. 18, to Thursday, Dec. 22, spiked 34 percent, compared with the same period a year ago, according to Responsys, which tracks e-mail activity from more than 100 merchants.

According to Beemer's consumer surveys, 60 percent of shoppers polled were looking for discounts of more than 50 percent to get them to buy. That's up from last year's 51 percent of shoppers polled.

Tracey Spears of Locust Grove, Ga., who was shopping Wednesday at Atlanta's Lenox Square Mall, said she got 75 percent of her holiday shopping done on Black Friday or the day after Thanksgiving. She took advantage of deals, including a Keurig coffee pot from Target and clothes from Hollister on sale.

"I had more money because I got a better bonus this year, but sales are important. You always want to buy stuff cheaper," she said.

Spears and others helped to create pronounced waves in spending.

"The downs and ups were much more accentuated," said Michael P. Niemira, chief economist at the International Council of Shopping Centers. "It just shows how cautious the consumer is. Consumers are bargain hunters more today than ever before."

In the week before Christmas, last-minute shoppers gave retailers a 4.5-percent increase in revenue over the same week last year at stores open at least a year, according to the International Council of Shopping Centers-Goldman Sachs Weekly Chain Store Sales Index. The index estimates sales at 24 major chain stores, including Macy's Inc. and Costco Wholesale Corp.

Revenue at stores open at least a year is an important measure of a retailer's performance because it excludes stores that open or close during the year.

Total retail revenue for the week that ended Saturday reached $44 billion, 14.8 percent higher than a year earlier, ShopperTrak estimates.

For the week that ended Nov. 26, which included the traditional start of holiday shopping on the day after Thanksgiving, stores had the biggest sales surge from the week before since 1993, according to the ICSC-Goldman Sachs index.

The post-Black Friday lull was deeper than usual. The two weeks after Thanksgiving weekend showed the biggest percentage sales decline since 2000.

Then, during the final two weeks before Christmas, sales surged again, by the highest rate since 2005, Niemira said.

The season "was good but uneven," he said.

Stores are expected to benefit when shoppers come back to spend gift cards, because people often spend more than the cards' value. In addition, gift card sales are recorded only when shoppers redeem them.

People have more money on their cards to spend. According to an ICSC-Goldman Sachs survey of shoppers conducted Sunday, 18 percent of holiday spending went toward gift cards, up from 14.6 percent last year.

A total sales figure for the whole season won't be available until after Dec. 31. And a fuller holiday spending picture will come Jan. 5, when stores including Target Corp. and Macy's release December sales figures. Government retail sales data will be released in mid-January.

ICSC said it expects holiday sales for November and December to rise in line with its forecast of 3.5 percent. The National Retail Federation expects total retail sales for November and December combined to increase by 3.8 percent, up from its earlier forecast of 2.8 percent issued back in October. That's still below the 5.2 percent holiday sales increase in 2010 from the previous year.

As proof that consumers are timing their spending to seek the best bargains, Black Friday was the biggest sales day, as expected, generating sales of $11.4 billion, up 6.6 percent from a year ago, according to ShopperTrak.

But the day after Christmas ranked fourth, behind Black Friday, Friday, Dec. 23, and Saturday, Dec. 17, according to final figures from ShopperTrak founder Bill Martin. Christmas Eve was strong too.

ShopperTrak measures foot traffic in 25,000 stores in the U.S. and blends those figures with economic data and proprietary sales figures from merchants. The data exclude sales from auto dealers, gas stations, restaurants and grocery stores.

"Shoppers are willing to spend when they know the biggest discounts are available," Martin said.

Brooks Brothers, the upscale men's and women's clothier that doesn't discount before Christmas, learned that this year. The Monday after Christmas, when the company offered discounts up to 40 percent, was a record spending day at its stores and its website.

"The first three weeks leading up to holiday were soft," Lou Amendola, chief merchandising officer, wrote in an email. "But customers really partook in the after-Christmas sales."

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. Uh, sorry Johnnie, but you are incorrect. Despite the assertions by yourself and various defenders and captains, sports attendance is NOT off significantly at most sporting events in the US. Variances in attendance has been in the range of single digits, both + & - for years now. MLB has had most of its best overall attendance nubers in the last decade, and that trend has been consistent for most major sporting events. The number one issue cited by most fans when asked about attendance is the overall cost of attending. The presence of HD and big screen televisions in home doesn't even register, as a factor for not attending an event. VALUE in the product is the key, and apparently is something lacking in the current ICS. What other explanation is there when with what is routinely touted as the "best" racing on the planet, fans are staying away in DROVES. A "close" title battle into the last event at Fontana, with the "cars and stars" of the ICS, and who showed up? MAYBE 8K. Sorry, but HD TV isn't to blame for that kind of fan apathy.

  2. Do you need finance to establish your business ? Are you interested in getting a loan at 3% from our private company? If so please Email: suntrust_oil@blumail.org

  3. If she was worth the $ the public outcry over direct tv dropping them would have kept them on their dishes as we have seen with other companies. I too quit watching channel 13 after she showed up since I left channel 8 because of her all show rather than production results. When Randy on 8 corrected her she had a big head and incorrectly challenged his correction for pronunciation of a city. Other antics while she matures was too much for me with her very inaccurate forecasts. All the forecasters were predicting rain until Thursday except Chris. They predicted sunny on Thursday but instead of rain until Thursday upon which the sun would finally make it out in full glory Chris was right on the money just as I too predicted looking at the radar on weather.gov. One thing I love about Angela is the fear you can see in her every time it thunders in the winter. It far exceeds the entertainment value of her body language (high heel noise drags, depression, etc) when her forecasts are so incorrect. Her hair stands on end, you have to see it!!!

  4. Good Day, Apply For A Loan I am Mr Fernadez Antonio, a private Loan lender and a cooperate financial for real estate and any kinds of business financing. I also offer Loans to individuals, Firms and cooperate bodies at 3% interest rate We offer any kind of loans. email us via fernadezloaninvest@outlook.com LOAN APPLICATION FORM First name:......................... Middle name:......................... Last name:........................................ Date of birth (yyyy-mm-dd):....................... Gender:........................................... Marital status:................................... Total Amount Needed............................... Loan Duration.................................... Address:.......................................... City:............................................. State/province:................................... Zip/postal code:.................................. Country:.......................................... Phone:............................................ Fax:.............................................. Mobile/cellular:.................................. Monthly Income.................................... Occupation:....................................... Best Regard, Mr Fernadez Antonio.

  5. i will love to share my testimony to you all the people in world i got married to my husband about 2 year ago we start having problems at home like we stop sleeping on the same bed,fighting about little things he always comes home late at night,drinking too much and sleeping with other women out side i have never love any man in my life except him. he is the father of my child and i don't want to loose him because we have worked so hard together to become what we are and have today .few month ago he now decided to live me and the kid,being a single mother can be hard sometimes and so i have nobody to turn to and i was heart broken.i called my mom and explain every thing to her,my mother told me about DR.okoro how he helped her solve the problem between her and my dad i was surprise about it because they have been without each other for three and a half years and it was like a miracle how they came back to each other. i was directed to DR. okoro on his email:okorospell@gmail.com and explain everything to him,so he promise me not to worry that he will cast a spell and make things come back to how we where so much in love again and that it was another female spirit that was controlling my husband he told me that my problem will be solved within two days if i believe i said OK So he cast a spell for me and after two days my love came back asking me to forgive him i Am so happy now. so that why i decided to share my experience with every body that have such problem contact Dr okoro the great spell caster on his email addresses spellcasterforlove@outlook.com

ADVERTISEMENT