With just a few days left before Christmas, US retailers are in a lather to attract last-minute shoppers to salvage what has been a mediocre month.
Department-store operator Macy's Inc has slashed prices on everything from clothing to jewelry, while Toys "R" Us is offering price cuts of up to 75 percent this weekend. At stake are retailers' profits for the year and perhaps even the strength of the economy.
While consumers jammed stores at the start of the season for big discounts and shopped early for Nintendo Co's hard-to-find Wii game console, popular video games like Guitar Hero III: Legends of Rock and Australian sheepskin UGG boots, they waited until the end for most everything else, to take advantage of the best deals amid a challenging economy.
The biggest disappointment comes from women's apparel, extending a downturn that's grown deeper in recent months and serving as an ominous sign for the health of retailing in general. Women do the primary shopping for the family, so analysts say it's troubling that they are spending less time in the stores.
"There's been a malaise" among women's clothing sales and "it has spread to other areas," said Dan Hess, chief executive of Merchant Forecast, a New York-based research firm. "The panic button has been pushed, particularly in department stores."
And even with an expected sales surge this weekend, which traditionally accounts for about 10 percent of holiday sales, Lazard Capital Markets analyst Todd Slater expects that the last-minute spending will be "too little, too late" to save Christmas.
"When people think they are in a recession, they spend like they are in a recession," Slater said.
A series of snowstorms hampered spending in recent days, but clearly, economic worries -- particularly higher gas prices, an escalating credit crisis and a slumping housing market -- weighed on shoppers' minds.
According to ShopperTrak RCT Corp, a research company that tracks total sales at more than 50,000 retail outlets, business for the week ended yesterday slipped 0.4 percent compared to the same week last year. Total US traffic for the same period slumped 8.9 percent from a year ago.
Hess estimated that discounts at department stores are about 10 percent to 15 percent higher than a year ago, a worrisome sign for profits.
Slater noted that even gift card sales have been disappointing; in some cases, the gift card business may be "even down," based on spot checks with retailers.
The toy industry is expected to match last year's sales, at best. In addition to a challenging economy, the industry was hurt by a slew of recalls of Chinese-made products that made some shoppers cautious.
Online retailers, which have had an uneven season, are ending with a strong finish. According to comScore Inc, consumers spent almost US$25 billion online from Nov. 1 through last Tuesday, a 19 percent increase, though a bit below its 20 percent forecast.
While it is hard to discern how much of the discounting in the final hours is unplanned, stores are clearly slashing prices to eke out sales wherever they can.
Toys "R" Us stores are staying open till midnight every night until Christmas Eve. Several of Macy's stores in New York, will stay open around the clock until 6pm on Christmas Eve.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure