Retailers currently have the holiday blahs. Two big surges — Thanksgiving and Christmas Eve weekends — failed to offset thin traffic and flat sales in the days between. As a result, this week will be crucial for merchants as they seek to salvage the overall holiday period.
Retailers are looking for a wave of gift card redemptions, early spring and resort selling at full price, and winter clearances to unload excessive inventories of outerwear, ornaments, candles and gift sets to get them back on track for low-to-mid-single-digit holiday gains.
For mainstream department stores and specialty chains, week-five [Dec. 24 to 31] represents roughly 45% of week-four’s volume; upscale stores generate over 50% during the fifth week.
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It hasn’t been all bad news so far, however. Overall, retailers kept their cool, held the line on markdowns, and said price cutting was no more severe than last year. As a result, margins should not suffer even though revenues might be below initial projections. And there are some big winners at this point — luxury purveyors such as Barneys New York and Bergdorf Goodman; aggressive mainstream promoters such as J.C. Penney and Kohl’s that have been capturing market share for months from rivals; retailers that had momentum going into the season, such as Nordstrom and J. Crew; electronics and technology chains, and fashion Web sites, though Internet sales at multichannel retailers could have sapped business from their own brick-and-mortar stores.
Weaker performers during the period appear to have been certain moderate to better priced department stores, discounters such as Wal-Mart, and a few specialty chains such as Gap. Regionally, the Midwest and Northeast were said to be the weakest, with the exception of New York City where tourists jammed the streets and where "it was like catching fish in a barrel," said one retail chief executive officer.
On Friday and Saturday, selling was strong. Retailers said volume far surpassed that of the corresponding day last year, but Sunday’s crowds were thinner than expected, and by around 4 p.m., business came to a standstill. According to ShopperTrak RCT Corp., "super Saturday" generated $8.72 billion in sales, just short of Black Friday’s $8.96 billion.
What were the hot sellers? Gift cards emerged as the hottest item of the season, followed by designer and aspirational handbags from Gucci to Coach; jewelry, particularly diamonds; party dresses; Uggs and other footwear; contemporary sportswear; early spring sellers, and electronics, including iPods, flat screen plasma TVs and game consoles, especially the PlayStation 3 if it could be found.
On the negative side, store executives said there were no red-hot, must-have fashion items this season that could have propelled related categories, and that the entire cold-weather category, from coats and furs to gloves and thermal sleepwear, was a bust due to the abnormally high temperatures, often in the high 40s and 50s.