Justine Griffin/Sarasota Herald-Tribune—Christmas may be over, but the deals are not.
Bargain hungry shoppers can still find marked down prices at chain stores this week and likely through the rest of the year, as companies make an effort to purge inventories — and perhaps save the season — before the start of 2014.
Target launched a new round of sales on its website Christmas Day.
Kohl’s department stores and Walmart sites across the country opened at 5 a.m. on Thursday, hoping to attract new shoppers and entice those with returns to cross shop.
Malls in Southwest Florida were buzzing the day after Christmas, with shoppers eager to return items and making purchases.
Dec. 26 is one of the busiest shopping days of the year, often for activating gift cards and buying accessories for holiday gifts, such as iPad or cell phone cases.
While the end of the holiday season may mean a lull for most chain stores, it is just the beginning in Southwest Florida, maintains Bob Parker, who manages the JC Penney store at Sarasota Square Mall.
“Unlike the rest of the country, we’re busy in the winter because of the tourist season,” Parker said Thursday. “So we’re just getting started.”
But for many — if Black Friday and the holiday shopping season so far is any indicator — retail sales likely will continue to be relatively flat through the end of 2013.
Retailers are working hard to “turn more after-Christmas browsers into buyers,” said Bill Martin, founder of Shoppertrak, a Chicago-based firm that analyzes foot traffic in malls.
Martin’s firm figures that traffic at retail plazas and malls was down by 3.1 percent during the week leading up to Christmas from a year ago. Brick-and-mortar traffic decreased by 21.2 percent compared with 2012.
But despite those headwinds, data released Thursday by another entity showed that sales were still up from a year ago.
MasterCard Advisors SpendingPulse reported that U.S. retail sales rose 3.5 percent, helped by deep discounts at malls and purchases of children’s apparel and jewelry.
Sales of holiday-related categories, such as clothing, electronics and luxury goods, rose 2.3 percent from Nov. 1 through Dec. 24 compared with a year earlier, the Purchase, N.Y.-based research firm said.
SpendingPulse tracks total U.S. sales at stores and online via all payment forms.
Falling store traffic in recent weeks and uneven demand, especially for apparel, spurred chains to risk earnings by pouring on the discounts to generate sales.
Retailers including Gap Inc. were offering as much as 75 percent off and some — Macy’s and Kohl’s, for example — kept stores open around the clock.
“You are seeing, ‘It’s OK for me to go out and spend,'” said Sarah Quinlan, a senior vice president at MasterCard Advisors. “That being said, they are still being cautious, and they are picking their retailers.
“It is not hot 2006-2007 spending we are seeing.”
Age of the ‘prepared shopper’
Shoppertrak predicted that continued markdowns and doorbuster deal-type savings will drive people into stores through the rest of the year, expecting that phenomenon especially on Thursday, the day after Christmas, and on Dec. 28, the last Saturday of the month.
The International Council of Shopping Centers is still predicting overall sales to be up this year by a modest 3-4 percent.
The age of the “prepared shopper” is troublesome for retailers, who rely on impulse buys during the busy shopping days like Black Friday or so-called “Super Saturday,” the last Saturday before Christmas.
Doorbuster deals are meant to draw shoppers in, but make retailers very little money, said Jeff Green, a Phoenix-based retail analyst.
“Retailers will see a pretty good November but not as good December,” Green said. “They started marketing so early this year and with Hanukkah landing before Black Friday, I don’t see a lot of shoppers waiting until the end of this year.”
While the U.S. economy grew at a surprising 4.1 percent annualized rate in the third quarter, the gain was driven by increased spending on services such as health care and recreation as well as companies boosting software investments.
Incomes increased 0.2 percent in November after dropping 0.1 percent the prior month. The Bloomberg survey median called for incomes to rise 0.5 percent last month.
As a result, the expansion has largely bypassed retailers such as Wal-Mart Stores Inc., which last month trimmed its profit forecast as unemployment and higher taxes kept many customers from increasing spending.
A week later, Target Corp. posted third-quarter profit that fell 46 percent and forecast fourth-quarter earnings that trailed some analysts’ estimates.
To capture shoppers’ attention, stores deepened discounts, promoting extra deals in the last days before the Christmas holiday.
Gap’s Old Navy chain on Dec. 22 started offering as much as 75 percent off throughout the store. “The After Holiday Sale Starts Today,” the chain said in a full-page ad in The Washington Post.
The promotions were the most prevalent since 2008, said Craig Johnson, president of Customer Growth Partners in New Canaan, Conn.
“It appears 50 percent off has been the price of entry this year,” Simeon Siegel, a New York-based analyst at Nomura, wrote in a note to clients Dec. 24.
“Although there will be some holiday sales winners, very few will escape the discount-driven pressures on margin.”