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Mon, Dec 25, 2006 - Page 10 News List

US retailers' sales might increase 5% on late shopping


US retail sales may rise 5 percent this holiday season, boosted by consumers who put off buying gifts and took advantage of this year's extra shopping day before Christmas.

Holiday sales are increasing at the slowest pace since 2002, although this year's gain is still more than the 4.6 percent average of the past 10 years, according to National Retail Federation data.

Saturday was probably the biggest shopping day of the year, surpassing the day after Thanks-giving, the International Council of Shopping Centers (ICSC) said.

Wal-Mart Stores Inc locations were open all night.

Saks Inc's Saks Fifth Avenue offered furs for as much as half off.

Federated Department Stores Inc's flagship Macy's store promised same-day delivery in New York City.

"I'm doing last-minute shopping," said David Dangel, a 51-year-old New York jewelry manufacturing executive. "I tend to procrastinate."

Dangel planned to spend the same as last year, or less than US$5,000. On Saturday he bought a Prada bag for his sister and was headed to Barneys New York.

Stores open at least a year may generate sales of US$15 billion in the last two days before Christmas, ICSC said.

Since Christmas was on a Monday this year, shoppers had an extra weekend day to shop compared with last year and a reason to delay their purchases, said Mike Niemira, the ICSC's chief economist.

The increasing popularity of gift cards has made consumers extra-prone to last-minute purchases, he said.

The National Retail Federation (NRF), which represents the biggest US chains, expects retail sales to rise 5 percent last month and this month combined.

The increase is less than the 6.1 percent gain of a year earlier.

"As long as there is a strong finish, we'll probably be pretty much where we expected: a season that is good but not as good as a year ago," Niemira said.

Holiday spending will total US$457.4 billion for last month and this month combined, the Washington-based NRF said.

About 32 percent of the retail industry's profit and 27 percent of sales came in the last quarter of last year, the ICSC said.

The Standard & Poor's 500 Retailing Index, which includes 29 companies, is little changed since Oct. 31, trailing the benchmark's gain of 2.4 percent.

Wal-Mart shares have slumped 7.6 percent, while Federated has lost 13 percent.

Wal-Mart, the world's largest retailer, expects this month's comparable-store sales to rise as much as 1 percent, which would be the smallest gain since 2000.

Wal-Mart on Dec. 22 was offering discounts including 37-inch flat-screen TVs for US$997, down from US$1,297.

Target Corp, the US' second-largest discounter, said last week that this month's sales at stores open at least a year will be within its forecast for a gain of 3.5 percent to 5.5 percent.

Retailers want gift-card holders to return after Christmas and buy more full-priced items.

Many merchants offer new and spring merchandise to tempt those holders.

Card sales will jump about a third this holiday from a year ago, the NRF has said, as consumers increase their average gift-card spending to US$116.50 from US$88.

Analysts have cited Novem-ber wage and income growth and higher-than-expected consumer confidence this month.

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