Seen as the last hope this year to provide a vital boost to slow turnover, annual sales in two major department store chains ended yesterday with revenue targets met. However, shoppers' growing appetite for discounts and gifts have posed new challenges for retailers.
Pacific Sogo Department Store (太平洋崇光百貨), which owns four outlets nationwide, concluded its 12-day annual sale yesterday at its flagship store on Taipei's Zhongxiao E Road. Sales at its three outlets outside Taipei finish on Sunday.
"Performance has been reasonably good and we are confident of achieving our NT$5 billion (US$152 million) target even though temperatures were higher than the same period last year by an average of 5oC, which adversely affected winter garment sales," spokesman James Wang Kuo (汪郭鼎松) said.
Shin Kong Mitsukoshi Department Store (新光三越), the nation's largest retailer also had reason to be cheerful. Its 13 outlets this year for the first time held simultaneous annual sales lasting a record-long duration between Oct. 5 and Sunday.
Traditionally, Shin Kong's stores nationwide decided their own schedules for their mega sales.
The new strategy proved effective, said the company's spokeswoman, Shauna Lee (李香萩).
"We have met our target of NT$16 billion during the course of our annual sales, posting a single-digit growth from last year," she said.
The figure, which would account for 25 percent of estimated annual sales of NT$64 billion, helped turn around Shin Kong's negative growth recorded in the first three quarters.
This year, the unprecedented consumer bad loan crisis struck a blow to the nation's retail industry, weakening consumer confidence and contracting consumption, leaving department stores the most severely affected.
During the first eight months of the year, department stores and shopping malls saw revenues shrink by 2.37 percent year-on-year, compared with 9.26 percent growth recorded by convenience store chains, according to statistics from the Ministry of Economic Affairs.
Private consumption is expected to grow 1.7 percent, lower than the growth rate of 2.7 percent last year and 3.9 percent in 2004, the statistics bureau's estimate showed.
Last-ditch efforts to offer further incentives, such as extending the duration of sales and offering bigger discounts, has caused concern.
Far Eastern Department Store (
For example, Far Eastern consumers obtained a NT$200 voucher for every NT$2,000 purchase of cosmetics and lingerie.
"This is like feeding consumers morphine," said Wang Kuo of Pacific Sogo.
He said Pacific Sogo would not extend the duration of sales as this type of promotional activity destroys normal market mechanisms.