On what was supposed to be the biggest shopping weekend of the holiday season, consumers flocked to the nation's stores but remained frugal, despite heavy discounting and advertising blitzes.
The restrained spending in the final stretch before Christmas cast a further pall on the shopping season, already expected to be the worst in at least a decade.
PHOTO: AP
"This is supposed to be the ultimate peak Christmas shopping weekend," said Britt Beemer, chairman of America's Research Group, in Charleston, South Carolina. "I think it was even softer than Thanksgiving weekend."
Instead of the typical surge on the final weekend of the holiday shopping season, traffic and sales were up only slightly from the previous weekend, analysts said, down from the same time a year ago.
Holiday sales and profits for many merchants may end up coming in below already modest expectations, said Jeff Feiner, managing director of Lehman Brothers. That may drag retailers' profits down as much as 5 percent to 10 percent.
"The profit picture looks a lot worse. Traffic was still off for the most important weekend before Christmas, even with the rampant discounts," Feiner said.
This weekend's disappointing turnout is the latest blow to retailers, which suffered sluggish sales since the shopping season began the day after Thanksgiving.
Consumer electronics like game consoles and DVD players were the only bright spots, along with kitchenware and toys like Harry Potter products. Value-oriented chains, particularly Wal-Mart Stores Inc, fared better than department stores and specialty apparel stores.
The holiday season had five full weekends and was 32 days long, a day longer than last year. Many shoppers held back, however, because of worries about job security, or lingering concerns about the terrorist attacks.
Last year, a record 30.9 percent of all holiday sales came in the final seven days before Christmas, according to the International Council of Shopping Centers. The share is expected to drop to about 20 percent this year.
"This Christmas is more about people than buying gifts," Beemer said.
Marilyn Villano, 48, of Auburn, New York, used to procrastinate when it came to buying holiday gifts. This year, she finished shopping by Dec. 10.
"I just wanted to spend more time with my children and grandchildren," she said.
Many merchants, were counting on procrastinators, including Kmart Corp, which kept its stores' doors open straight from 6am Thursday through 8pm Christmas Eve yesterday.
Bloomingdale's sent out an extra catalog to more than 1 million homes last week, hoping to entice last-minute shoppers into stores.
Bloomingdale's Chairman Michael Gould said he was pleased with the overall weekend's sales receipts, though revenues at its New York store were below expected. Overall, holiday sales should be just slightly above our modest goals, he said.
The prospect of deep discounts made Diane Shaw, 40, of Topeka, Kansas, hold off until the last minute.
"The things in the stores now are cheaper than they were in the ads two or three weeks ago," Shaw said as she shopped at a Kansas City, Missouri, mall.
Luxury retailers weren't as fortunate. Holly Nelson, manager of Watch Station International Shop in Seattle, said the shop had hoped to sell US$3,000 worth of merchandise on Saturday, but sold just US$500 worth of merchandise.
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