- The Washington Times - Tuesday, December 16, 2003

Retailers are heading into the final eight days before Christmas, hoping to avoid slashing prices to unload merchandise before the season is over.

Shoppers won’t likely see the big end-of-season sales that they have come to expect. Retailers are keeping inventories lean this season so they won’t be stuck with excess merchandise that would have to be marked down to sell.

That’s what happened last year, which contributed to disappointing earnings for retailers.

Stores are reporting modest sales gains so far this holiday season, and the last week before Christmas has become critical for retailers.

Just 10 percent of consumers completed their holiday shopping by Dec. 10, according to the National Retail Federation (NRF). Last year, 15 percent of shoppers were finished at this time.

“We are a nation of procrastinators,” said Tracy Mullin, NRF’s president and chief executive. “With many consumers completing their holiday shopping — and some of them just starting — retailers are expecting crowded parking lots and heavy traffic this weekend.”

The Saturday before Christmas has been the busiest shopping day of the season for the last several years, according to the International Council of Shopping Centers (ICSC). Last year sales during the week before Christmas accounted for 41 percent of sales between Thanksgiving and Christmas, the ICSC said.

“It’s likely to be a very busy time, but consumers will not see widespread storewide bargains,” said Michael Niemira, ICSC’s chief economist and director of research. “Extremely lean inventories with improving demand — that combination means less bargains,” Mr. Niemira said.

However, this year, as in the past, shoppers are waiting for big markdowns.

Duncan Simester, professor of marketing at MIT’s Sloan School of Management, said consumers will continue to see sales on certain items and holiday-themed products but not to the same extent as in 2002.

“Retailers were forced to discount heavily last year because they had so much inventory,” Mr. Simester said.

The NRF is expecting holiday sales to increase 5.7 percent this year to $217.4 billion compared with last year.

Sales for the week ending Dec. 13 gained about 3.9 percent from the comparable week in 2002, according to retail-sales tracker ShopperTrak. Sales jumped 17 percent from the prior week ending Dec. 6 when a snowstorm blanketed the Northeast.

Retailers initially were not optimistic about this season, but as last year was disappointing, they expect some improvement, Mr. Simester said.

Wal-Mart Stores Inc. predicted that December growth in same-store sales will be closer to the low end of 3 percent to 5 percent.

Shoppers have delayed holiday purchases and have bought more gift cards. Fewer shoppers visited its stores last week.

Last-minute shoppers will hit a variety of stores to finish their purchases. Nearly 50 percent of consumers planned to finish their shopping at discount stores, while about 44 percent will shop at department stores, the NRF said.

Online sales are continuing to do well this season. Excluding travel and auctions, online sales were up 31 percent to $2.16 billion for the week ended Friday, according to comScore Networks Inc.

Online holiday sales at retailers like Amazon.com Inc. and Barnes & Noble’s Web site may jump this week as shoppers take advantage of deadlines for free shipping of Christmas gifts.

Catalog companies are driving more of their business through their Web sites, according to the Direct Marketing Association. More shoppers are ordering merchandise from mailed catalogs through the Web site.

The association is estimating $133 billion in catalog sales in 2003 — up from $126 billion in 2002. About 37 percent of catalog sales come in the fourth quarter, which includes Halloween and Christmas.

Nearly 64 million shoppers are expected to shop online this holiday season and shell out about $17 billion — a 20 percent increase in November and December sales from last year, according to Jupiter Research.

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