By Phil Wahba
ELMHURST, N.Y. Dec 23 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 Dec. 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
"Retailers recognize that consumers will wait as long as
they need to," said Charles O'Shea, senior analyst at Moody's
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. [ID:
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.
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
Gold predicted no disruptions in the last two days before
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