- The Washington Times - Sunday, December 12, 2004

NEW YORK (AP) — With less than two weeks of shopping left until Christmas, the nation’s malls and stores stepped up discounts over the weekend, but business appeared to be mixed, analysts said.

Wal-Mart Stores Inc., which became more aggressive on pricing after a disappointing start to the holiday shopping season, continues to struggle. The Bentonville, Ark.-based retailer said that for the week ended Friday, sales of winter merchandise were below expectations, and its general merchandise business was not as strong as food sales. However, the world’s largest discounter is sticking to its December sales forecast.

Sears, Roebuck and Co., which plied shoppers with early bird specials on Saturday, reported “good customer traffic,” said Bill Masterson, a company spokesman.

Meanwhile, business at luxury stores continued to be robust, with well-heeled shoppers snapping up designer handbags, jewelry and items such as $1,200 massage chairs.

Karen MacDonald, a spokeswoman at mall operator Taubman Centers Inc., said business on Saturday at luxury chains was up in the high single-digit to double-digit percentages from a year ago. For the rest of the merchants, sales were even with last year or rose a modest single-digit percentage from a year ago.

“Retailers are all revved up, all ready to go, and the consumers are just taking their sweet time, walking around, checking out items, but not buying,” said Marshal Cohen, senior industry analyst at NPD Group Inc., a market-research company based in Port Washington, N.Y. He checked out malls in New Jersey, Pennsylvania and Connecticut over the weekend and noted that traffic was disappointing.

He added, “For the luxury market, it feels like Christmas, but to everybody else — the midlevel and lower-end customer — it is not going to be a great Christmas.”

Ellen Tolley, a spokeswoman at the National Retail Federation, estimated that traffic was up slightly this past weekend from a year ago. She thinks that at this point, shoppers have done less shopping than a year ago. She blamed it, in part, on seasonably warm weather, which tempted shoppers to turn to outdoor activities and stay out of malls, and the increasing popularity of gift cards, the bulk of which are purchased during the last few days before Christmas.

After a disappointing start to the holiday season, merchants have seen a modest pace in business since and were relying even more on a spending splurge this past weekend to recoup lost sales and meet their holiday sales forecasts. Last year, the second Saturday before Christmas was the fifth busiest day of the year, according to the International Council of Shopping Centers.

Still, Miss Tolley expects the nation’s stores are “on par” for a moderate holiday season, sticking with the trade association’s forecast for a 4.5 percent gain in total retail sales, which exclude restaurant and auto sales.

Miss Tolley noted that the holiday season, like other years, will be decided at the last minute and is pinning her hopes on procrastinators who are waiting for better deals.

“I always wait to the last minute, though I keep a list in my mind,” said Mariana Jark, who was among the crowds outside the FAO Schwarz store in Manhattan on Saturday. She noted that she can get better deals on holiday gifts such as music, digital video discs and books if she postpones her shopping.

Meanwhile, at a Dillard’s Inc. department store in Little Rock, Ark., Amber Herring was clutching shopping bags from a half-dozen stores. The bags were full of items she bought in October and was ready to return.

“I’m returning to get the better deals,” she said. “I bought before, and now, I’m bringing them back to get the cheaper price.”

Miss Herring said she tried to get her shopping done by October, but noticed more deals as the holiday season continued, specifically on shoes and coats.

The economy has seen improvement, but shoppers are frugal. Although gasoline prices have fallen recently, they are still high, and consumers, particularly low- and middle-income Americans, have cut spending on clothing and other nonessentials. They also are nervous about the job market, where improvement has been volatile.

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