Retailers Usher in Post-Christmas Business With Deep Discounts Amid Signs of Holiday Gloom
NEW YORK (AP) -- With the 2007 run-up to Christmas boosted by a last-minute sales surge, retailers are putting an extra emphasis on after-Christmas discounts, hoping bargain shoppers and gift-card splurgers can enrich stores' holidays.
Target Corp., the nation's No. 2 retailer, warned late Monday that its same-store sales might decline for December, while a broad gauge of consumer spending released by Mastercard Inc., which includes estimates for spending by check and cash, showed a modest 2.4 percent increase for the holiday season.
So stores tried to position themselves to extend the holiday season.
Toys "R" Us Inc., which will open at 8 a.m. on Wednesday, two hours earlier than last year, will offer such deals as 40 percent price cuts on all MP3 and iPod accessories. Macy's Inc. is offering 50-75 percent off cashmere sweaters, while Saks Fifth Ave. has cut prices on fur coats by 40 percent to 60 percent.
Online stores were also slashing prices further to get rid of holiday leftovers. Potterybarn.com is having a post-Christmas sale that will offer 60 percent discounts on holiday decor and 50 percent price cuts on rugs.
The post-Christmas season has become more important with the increasing popularity of gift cards. Gift card sales are only recorded on retailers' balance sheet when cards are redeemed.
According to the National Retail Federation, consumers are expected to spend a total of $26.3 billion in gift cards this holiday season, up 42 percent from $18.5 billion in 2005.
ShopperTrak RCT Corp said that the week after Christmas accounts for about 16 percent of total holiday sales.
"This is going to be a more important chunk of business than most people realize," said Scott Krugman, a spokesman at NRF.
Marshal Cohen, chief industry analyst at NPD Group Inc., a market research firm, agreed, noting that when the industry looks at the holiday results, they need to include January business.
"When we take a look at the results of this holiday retail season, it will be important to remember that the rules have changed and so should the way we read the success of the holiday," Cohen said.
National Retail Federation: http://www.nrf.com
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