Bargain-hungry shoppers buy less on weekend before Christmas

ELMHURST, New York Mon Dec 23, 2013 5:01pm EST

1 of 4. Shoppers ride the escalator at Macy's Herald Square in New York in this November 28, 2013 file photo. U.S. consumers shopped less on the final weekend before Christmas despite deeper discounts, the latest sign of how difficult a season this is turning out to be for retailers. Picture taken November 28, 2013.

Credit: Reuters/Eric Thayer

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ELMHURST, New York (Reuters) - U.S. consumers shopped less on the final weekend before Christmas despite deeper discounts, the latest sign of how difficult a season this is turning out to be for retailers.

Shoppers also showed signs they will do more of their spending after December 25 than they did in the same period last year, in hopes of snagging even more deals.

Analytics firm RetailNext estimated that U.S. retail sales fell at brick-and-mortar stores over the weekend, which included two of the four most important shopping days of the season, compared with the same days last year. That does not include online sales, which have been strong.

The number of visits to stores fell 4 percent, RetailNext said.

"Retailers recognize that consumers will wait as long as they need to," said Charles O'Shea, senior analyst at Moody's Investors Service.

Analysts have said this is turning out to be the most competitive holiday season since the recession, forcing retailers to ramp up promotions. The season generates 30 percent of sales and 40 percent of profits for many stores.

Major retailers significantly boosted the frequency of their promotions in the first part of December, according to data prepared for Reuters by Market Track, a firm that provides market research for top retailers and manufacturers.

Morgan Stanley analyst Kimberly Greenberg estimated in a research note that up to 85 percent of all goods at specialty apparel retailers were on sale this past weekend, compared with 75 percent a year earlier. She also said holiday season sales were likely to miss forecasts.

Data firm ShopperTrak estimated retail sales fell 2.1 percent over the weekend.

HOLDING OUT FOR BARGAINS

Katrina Attis, who was shopping at a J.C. Penney Co Inc store in a mall in Elmhurst, New York, on Sunday, said she focuses on her immediate family before Christmas. For herself and other members of her family, she will shop next week, when she expects bigger bargains.

"I'm doing my shopping on a budget, which is why I'm digging through the clearance bin," said Attis, 25.

Moody's O'Shea, who noted bigger discounts this past weekend than in the corresponding weekend in 2012 as he did store checks in various cities, said the problem was particularly acute for specialty apparel retailers.

He cited teen apparel chain Abercrombie & Fitch as one of the stores with the most noticeable increases in price cuts. Rival Aeropostale Inc, which is trying to stanch deep sales declines, was touting up to 70 percent off everything in its stores on Sunday.

While electronics chains have benefited from best-selling items like Microsoft Corp's Xbox One video-game console and Sony Corp's rival PlayStation 4, clothing has been a harder sell, he said.

No. 3 U.S. retailer Target Corp suffered from a 5 percent reduction in customer traffic over the weekend in the wake of a massive data breach, retail consultancy Customer Growth Partners LLC said.

Hackers stole data from up to 40 million credit and debit cards of shoppers who visited Target stores during the first three weeks of the holiday season in the second-largest such breach reported by a U.S. retailer.

SOME CHEER

Still, some retailers seem to be faring well. Chad Hastings, general manager of Town East Mall in Mesquite, Texas, said the department stores in his mall told him sales this weekend were better than expected. The mall is anchored by Penney, Macy's Inc, Dillard's Inc and Sears.

Retailers caught a break from Mother Nature. Despite a winter storm that hit major Midwestern markets such as Chicago and Detroit, no event was severe enough to disrupt holiday shopping in any part of the country, said Evan Gold, a senior vice president at Planalytics, a weather consulting firm in Berwyn, Pennsylvania.

Gold predicted no disruptions in the last two days before Christmas.

But in Canada, Target and Sears expanded store hours to accommodate shoppers affected by an ice storm that left 380,000 people without power in Ontario.

Retail experts expect the promotions to continue until the very end of the season in January.

"Without question, the shopper is in the driver's seat," said John Yozzo, a managing director at FTI Consulting in New York.

(Additional reporting by Siddharth Cavale; Editing by Dan Grebler, Jan Paschal, Joyjeet Das and Saumyadeb Chakrabarty)

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Comments (14)
morbas wrote:
On my tour via ‘Meals on Wheels’ delivery I see (IMHO) a very unhappy constituent base of retired and/or disabled and/or parents and/or ex military. I see NAACP reports on the 1% ownership of low cost import stores, using profits to further depress wage and benefits, to further suppress the (99%) people. Bargain hunting sales driver is a sympton of extreme wealth inequality. So is “the shopper is in the driver’s seat” a coded phrase? And that Macy RED STAR, is it a red flag?
morbas(i)

Dec 23, 2013 5:52am EST  --  Report as abuse
Renox wrote:
Good, but not good enough! You need to reduce your spending 99%. Buying all that cr#p, does not make you happier, nor it’s what Christmas is all about.

Dec 23, 2013 9:01am EST  --  Report as abuse
Mylena wrote:
If you have money you buy a lot. But, if your salaty were cutted, you buy meal, first, second rent, third, health care ( no expensive dental included). That, it.It is not necessary be one financial expert to know that: 10 plus 10 is always 20, not doubt

Dec 23, 2013 9:33am EST  --  Report as abuse
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