- The Washington Times - Tuesday, December 18, 2001

Retailers are slashing prices and offering outrageous deals in a last-ditch effort to salvage what could become a dismal holiday-sales season.
But for many stores those efforts aren't working yet. Store shelves that have looked scattered and sparse this close to Christmas in the past are in many cases still stocked.
"We are going to see a very aggressive promotional calendar these last days as some degree of panic sets in," said Stewart Cohen, a principal at the Ozer Group, a Needham, Mass.-based retail-consulting firm.
The number of goods marked down at clothing chains rose by 95 percent last week from a year ago, says Prudential Securities analyst Stacy Pak. Gap Inc., for example, cut prices on 543 items, almost three times as many as the 189 products discounted in the like period last year, she said.
The deep discounts designed to clear off store shelves will likely cut further into retailers' profit margins for the year, rather than boost their bottom line.
"We are going to continue to see a sluggish, struggling retail economy," Mr. Cohen said. "Retailers are still situated where they were in the beginning of the season."
While discount stores like Target and Wal-Mart are drawing customers in droves, specialty stores, especially clothing and luxury items, are being hit hard. But most retailers are hoping, as in previous years, many shoppers are just waiting to the last minute.
Holiday shopping at malls was off to a slow start the first official week of the holiday season, which began the day after Thanksgiving.
Those sales were down by 2.6 percent, compared to the first full week of shopping in 2000, according to the International Council of Shopping Centers (ICSC). The numbers have continued to drop. Mall sales were down 4.6 percent for the week ending Dec. 9, according to ICSC.
"People are going to department stores and leaving," Mr. Cohen said. "They're not seeing any value in specialty stores, and I don't think they will."
Retail analysts say consumers' wish lists have changed this year shifting from luxury items and apparel to home entertainment and electronics, like DVDs, computers and videos.
Sales of game consoles and game software at K-B Toys were strong this past weekend, but toy sales were unchanged from a year ago. The toy retailer, which has 1,400 stores, had a slight increase in sales this weekend compared with a year ago.
"We were hoping for better," said spokesman John Reilly.
Despite all the doom and gloom surrounding this holiday retail season, shoppers are still spending money.
For the first 24 days of the Christmas season, retail sales grew 1.8 percent, compared with the like period last year, according to Telecheck Services Inc., which analyzed checks written by consumers at 27,000 locations.
The National Retail Federation expects a 2.5 percent increase for 2001 holiday spending, compared with a 3.9 percent increase in spending last year.
To reach the NRF's expectations, retailers are holding out hope for last-minute shoppers.
Last year about 31 percent of Christmas sales were made during Dec. 18 and Dec. 24, ICSC said.
"Although consumers slowed their pace of spending, it is not unusual for this time of year, especially with a long, last weekend ahead," said Ira Silver, Telecheck's senior retail adviser. "Like in years past, we expect to see a significant surge in spending as we approach the end of the holiday season."
In the past five years, the Saturday before Christmas was the busiest shopping day of the season, according to ICSC.
This article is based in part on wire service reports.

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