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US Retailers Eye a Sparse Holiday Season

By    |   Tuesday, 24 December 2013 10:22 AM

It's shaping up to be a Blue Christmas for U.S retailers, beset by slower traffic and lukewarm sales, according to MarketWatch.

Industry researcher ShopperTrak said retailers' in-store sales for the final full week before Christmas, ending Sunday, Dec. 22, sagged 3.1 percent below 2012. Those are among the key shopping days of the season. Moreover, traffic was down 21 percent.

"We've been seeing downward traffic for the whole season," said Bill Martin, ShopperTrak founder, told MarketWatch. "Consumers were out there but they were just visiting fewer stores. They were very targeted for what they were buying."

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Martin said sales were compressed by the fact U.S. retailers have used heavy discounting, up to 50 percent off, and other sales gimmicks. “The discounts are heavier than last year,” he noted.

Morgan Stanley analyst Kimberly Greenberger is not optimistic about the holiday retail season.

"We think business picked up strongly this past weekend, as anticipated, but total holiday sales are still trending below plan," she said.

"The question now is will retailers meet or miss Street expectations? Beating, except for a few isolated cases, looks increasingly unlikely. If sales over the last few days before Christmas aren't terrific, negative 4Q earnings revisions could follow."

Greenberger estimated 80 percent to 85 percent of all specialty apparel retail goods are on sale, and about 50 percent of the retailers in her coverage universe are giving whole-store discounts, with both data points trending higher than in 2012.

On a brighter note, she said, Michael Kors and Macy's appear to be doing better than some of their peers are.

Another favorable note may be e-commerce Christmas sales. Custora Pulse, which tracks data from over 100 U.S. retailers, reported online sales between Dec. 15 and Dec. 18 climbed 13 percent, with 23 percent traffic growth.

Despite all of the heavy sales and promotions, some shoppers appear to be waiting until after Christmas in hopes of finding even bigger discounts, CNBC reported.

"When you ask consumers why they didn't get finished, the No. 1 reason was they were waiting for bigger discounts," said Britt Beemer, founder and chairman of America's Research Group (ARG). ARG data showed about one-quarter of last-minute shoppers said they were waiting for 60 percent or 70 percent discounts.

Gift cards could also represent a post-Christmas sales boost for retailers, according to Mark LoCastro, spokesman for DealNews.

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It's shaping up to be a Blue Christmas for U.S retailers, beset by slower traffic and lukewarm sales, according to MarketWatch.
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2013-22-24
Tuesday, 24 December 2013 10:22 AM
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