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BirdGuano
12-24-2008, 04:05 PM
http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2008/12/24/financial/f074647S44.DTL


Last-minute shoppers can't save dismal Christmas
By ANNE D'INNOCENZIO, AP Retail Writer
Wednesday, December 24, 2008
(12-24) 10:20 PST New York (AP) --

Last-minute shoppers headed to the nation's stores and malls on the day before Christmas, looking for the final items they needed and searching for good deals — but for retailers, the season was essentially over long ago.

Many merchants are already tallying up just how dismal their sales were in a season expected to be the worst in decades.

"It's beyond the worst fears of retailers," said C. Britt Beemer, chairman of America's Research Group.

A lot is at stake. The holiday shopping season accounts for as much as 40 percent of annual profits for many retailers, and the earnings outlook is growing more dire every week.

Retailers' woes were good news for the dwindling numbers of shoppers who could afford to load up on deals. With mounds of inventory still left to sell, merchants are expected to deepen the discounts even more the day after Christmas.

But if 75 percent off before Dec. 25 didn't make shoppers splurge, will even bigger deals do the trick amid mounting worries about layoffs and shrinking retirement funds?

Crowds were light early Wednesday at the Square One Mall in Saugus, Mass., a suburb north of Boston. Wander Caldas, a 50-year-old truck driver from Everett, Mass., said his wife had lost her job and wasn't working this year, so the family — including his 12-year-old son — had cut their Christmas spending.

"We cut it like in half," Caldas said. "That's why I have to slow down."

Caldas said his son wanted an iPhone and Sony PlayStation 3, but "it's not a good time. He'll have to wait."

Barbara Rice came to Mondawmin Mall in Baltimore for some last-minute gifts and knew she'd find deals, saying she regularly saw "half off, 75 percent off."

"I'm almost done," she said. "It's just the little leftover stuff I have to do today."

Her daughter, Donyai Rice, wasn't planning on shopping when she got to the mall. However, she found a $60 Sony PlayStation2 video game system, a Nintendo Game Boy, a cell phone and shoes all on sale.

In Christmases past, the retail industry had relied on a surge before and after Christmas to help save the season. But the holiday period was virtually over before the Thanksgiving weekend ended as stores grapple with the most severe retrenchment in consumer spending in decades.

Facing pressure from vendors and consumers who aren't spending, Circuit City Stores Inc. filed for bankruptcy protection last month. It plans to keep operating, but toy retailer KB Toys, which filed for bankruptcy protection earlier this month, has already begun to liquidate all of its stores and will shutter operations completely.

Merchants desperate to pull in shoppers started deeply discounting holiday goods as soon as they hit stores starting in November. But except for a shopping binge on the day after Thanksgiving, Americans have remained tight-fisted. When they do buy, they are looking for small-ticket, more practical gifts.

Another worrisome sign is that people are taking advantage of deep discounts by buying items they will need in the future. Paige Wallington of Raleigh, N.C., who came out just before 8 a.m., said she needed to get items for family members before heading off to work. But she also found herself in the ornament section, where prices were up to 60 percent off.

"Some for this Christmas, some for next," the 46-year-old collections officer said while eyeing a snow globe and carrying a few bags of clothing. "I'm shopping while I still have a job."

Analysts have kept slashing their holiday estimates. Michael P. Niemira, chief economist at the International Council of Shopping Centers, now expects that sales at established stores for November and December will fall 1.5 percent to 2 percent — making it the weakest holiday season since at least 1969, when the index began.

Excluding Wal-Mart Stores Inc., one of the few bright spots in retailing, same-store sales could be down as much as 7 percent for the holiday period. Same-store sales are sales at stores opened at least a year and are considered a key indicator of a retailer's health.

Stores are expected to post an 18.8 percent decline in fourth-quarter profits, marking the seventh consecutive period of profit declines, according to Ken Perkins, president of research company RetailMetrics LLC. He expects profits to keep tumbling into the first quarter, with predictions so far of a 10.4 percent drop.

Merchants can't even count on gift card sales, which have been well below last year, to boost profits and sales. In the past, gift cards had lifted post-Christmas season as shoppers went back to the stores to redeem the plastic on discounted and regular-priced merchandise. That's because shoppers find they get better value by buying discounted merchandise. Consumers are also fearful of buying gift cards from retailers that may go bankrupt.

Karen MacDonald, a spokeswoman at Taubman Centers Inc., which operates 24 malls in 11 states, said that gift card sales have been tracking anywhere from single-digit declines to double-digit declines this season, a worrisome sign.

Gift cards "certainly drive business the week after Christmas," she said. "I think there were so many good deals out there that many people made that their gift of choice."

Maureen Kapnis, a restaurant owner in Salem, Mass. who was shopping Wednesday for some final small gifts for her family and friends at the Square One Mall, said that worries about store bankruptcies stopped her from buying many gift cards. She bought only a mall gift card.

"I did not do businesses," Kapnis said. "I was scared they were going to go under. In general, I played it safe. I went with the mall card."

flourbug
12-24-2008, 05:46 PM
I just got back from Target. It was busier than usual for Wednesday night, but nowhere near Christmas crowds. The shelves were well stocked - especially Christmas items. Not many people were buying decorations this year, or the usual holiday foods. They had counters FULL of bakery cookies and cakes.

Potemkin
12-24-2008, 06:36 PM
The Sears Hardware discount tools for Christmas was stripped.

Renegade
12-24-2008, 07:02 PM
Ended up at Walmart yesterday and Lowe's today. The folks were thick as flies in walmart but the ratio of heaped up buggies seemed to be lower to me. Looks like most folks were indeed shopping the lower priced and/or more needed stuff instead of just loading up on any and everthing.

Lowe's was almost deserted this afternoon.

Torange
12-25-2008, 12:24 AM
Merchants need to sell winter product at a price high enough to roll over for spring merchandise. If they don't get the money and can't get loans, they are out of business.

BirdGuano
12-26-2008, 04:10 AM
http://s.wsj.net/public/resources/images/P1-AO101A_RETAI_NS_20081225220014.gif

http://online.wsj.com/article/SB123025036865134309.html

DECEMBER 25, 2008, 10:35 P.M. ET
Retail Sales Plummet

By ANN ZIMMERMAN, JENNIFER SARANOW and MIGUEL BUSTILLO

Price-slashing failed to rescue a bleak holiday season for beleaguered retailers, as sales plunged across most categories on shrinking consumer spending, according to new data released Thursday.

Despite a flurry of last-minute shoppers lured by the deep discounts, total retail sales, excluding automobiles, fell over the year-earlier period by 5.5% in November and 8% in December through Christmas Eve, according to MasterCard Inc.'s SpendingPulse unit.

When gasoline sales are excluded, the fall in overall retail sales is more modest: a 2.5% drop in November and a 4% decline in December. A 40% drop in gasoline prices over the year-earlier period contributed to the sharp decline in total sales.

But considering individual sectors, "This will go down as the one of the worst holiday sales seasons on record," said Mary Delk, a director in the retail practice at consulting firm Deloitte LLP. "Retailers went from 'Ho-ho' to 'Uh-oh' to 'Oh-no.'"

The holiday retail-sales decline was much worse than the already-dire picture painted by industry forecasts, which had predicted sales ranging from a 1% drop to a more optimistic increase of 2.2%.

Luxury goods, once considered immune from economic turmoil, were hardest hit, with sales falling 21.2%, compared with a jump of 7.5% a year ago, when the economy had just begun to sputter. Including jewelry sales, the luxury sector plunged by a whopping 34.5%.

During the same period last year, overall retail sales rose a modest 2.4%, helped by late-season discounting that enticed procrastinating shoppers. But this year, after a moderate uptick in shopping activity boosted by steep promotions the Friday after Thanksgiving, shoppers closed their wallets and reopened them only cautiously, worried by job losses, a sinking stock market and a recession climbing into its second year.

"There has been a major contraction in consumer spending," Michael McNamara, vice president of research and analysis for MasterCard Advisors, said in an interview yesterday.

This spells a bitter disappointment for companies that had hoped the holidays would offset a year when sales have been sliding steadily, draining profits and, in many instances, undermining the ability to pay down debt. The industry already has seen a parade of retailers entering bankruptcy proceedings, such as Circuit City Stores Inc., and liquidating, including Mervyn's LLC and Linens 'N Things Inc. The weak holiday sales mean more chains are likely to follow suit next year.

'The Buying Climate'

To be sure, there was a glimmer of positive economic news this week as well, as the Labor Department released figures showing inflation-adjusted consumer spending inched up slightly in November as gas prices fell steeply. The personal savings rate also climbed in November.

Socking away more in the bank leaves less for splurging at the mall.

"It's all about restoring confidence in the buying climate and declining prices help to bring us there, but we're not there yet," said Michael Niemira, chief economist at the International Council of Shopping Centers.


At a Los Angeles Anthropologie store on Christmas Eve, even a clearance table at the apparel and home-goods store didn't tempt Gloria Langstaff, 60 years old. "We're spending less," said the librarian from Missoula, Mont., who is visiting Los Angeles on an annual holiday trip. The trip itself was a cutback from last year, when the family went to the Dominican Republic.

A final burst of spending retailers hoped for last weekend never came. Shopper traffic fell 27% compared with the same time last year, while sales declined 5.3%, according to ShopperTrak RCT Corp., which tracks sales in retail outlets nationwide.

flourbug
12-26-2008, 04:19 AM
One of the most telling signs of economic distress are the reports coming in last night that WalMart and other stores that were open Christmas Day were crowded with people buying presents. That tells me they used money that they received as a gift on Christmas Eve (office/employer gifts?) to buy gifts for others.

However, I can't make sense of: Shopper traffic fell 27% compared with the same time last year, while sales declined 5.3%

That sounds like the people who WERE out shopping, bought MORE than last year.

CanadaSue
12-26-2008, 07:08 AM
I couldn't make sense of that either, fb.

Fiddlerdave
12-26-2008, 01:09 PM
One of the most telling signs of economic distress are the reports coming in last night that WalMart and other stores that were open Christmas Day were crowded with people buying presents. That tells me they used money that they received as a gift on Christmas Eve (office/employer gifts?) to buy gifts for others.

However, I can't make sense of: Shopper traffic fell 27% compared with the same time last year, while sales declined 5.3%

That sounds like the people who WERE out shopping, bought MORE than last year.They probably did. There are those people who are doing VERY well, and they could well have bought more than last year. Certainly many prices are higher, despite the sales going on, and people doing well don't need to care about sales.

And people who had money may have stocked up or jumped on the last of the sales we will see for some time. Manufacturing is being cut heavily, so the sales will soon go away, certainly be much more rare by spring. Price rises will be staggering.

DReynolds
12-26-2008, 01:19 PM
However, I can't make sense of: Shopper traffic fell 27% compared with the same time last year, while sales declined 5.3%

It's sloppy reporting. Overall retail sales -- including e-commerce --declined 5.3%. Amazon today announced that 2008 was the best holiday season they've ever had.

If you only look at physical retail outlets, and exclude e-commerce, THAT dropped by 27% (ShopperTrak only looks at retail outlets). But of course there's no reason to exclude e-commerce from the stats so just forget the 27% number.

shalym
12-26-2008, 02:31 PM
One of the most telling signs of economic distress are the reports coming in last night that WalMart and other stores that were open Christmas Day were crowded with people buying presents. That tells me they used money that they received as a gift on Christmas Eve (office/employer gifts?) to buy gifts for others.

However, I can't make sense of: Shopper traffic fell 27% compared with the same time last year, while sales declined 5.3%

That sounds like the people who WERE out shopping, bought MORE than last year.
Maybe this is why?

http://www.streetinsider.com/Special+Reports/Amazon.com+(AMZN)+Has+Best+Ever+Holiday+Season+-+Plus+Fun-Facts/4262924.html

Amazon.com (AMZN) Has Best Ever Holiday Season - Plus Fun-Facts

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* Unusual 11 Mid-Day Movers 12/26: Jones Apparel (JNY) Up On Amended Credit Facility; GM (GM) Up On GMAC Bank Holding News
* Morning Movers 12/26: GM (GM) Up On GMAC Bank Holding News, Amazon (AMZN) Up on Strong Holiday Season
* Amazon.com (AMZN) Has Best Ever Holiday Season - Plus Fun-Facts
* Amazon.com's 14th Holiday Season Is Best Ever
* Beacon Equity Issues Technical Trade Alerts on Market Movers: FMCN, CMCSA, AMZN, DELL, AAPL, EBAY

More News related to AMZN

More News related to Retail Sales

* Unusual 11 Mid-Day Movers 12/26: Jones Apparel (JNY) Up On Amended Credit Facility; GM (GM) Up On GMAC Bank Holding News
* Notable Mergers and Acquisitions of the Day 12/26: NYT, TDY, FTI
* Morning Movers 12/26: GM (GM) Up On GMAC Bank Holding News, Amazon (AMZN) Up on Strong Holiday Season

More News related to Retail Sales
December 26, 2008 8:23 AM EST

Amazon.com, Inc. (NASDAQ: AMZN) announced the 2008 holiday season finished as its best ever, with over 6.3 million items ordered worldwide on the peak day, Dec. 15, which is a record-breaking 72.9 items per second.

Amazon.com 2008 Holiday Fun-Facts (www.amazon.com only):

Amazon.com sold enough “Breaking Dawn” books that stacked end to end they would reach the summit of Mt. Everest eight times.

During the period from Nov. 15 - Dec. 10, Amazon sold one copy of Microsoft Office Home and Student 2007 every 2.5 minutes.

The weight of all GPS devices sold from Black Friday through December equals the combined weight of 151 Mini Coopers.

Amazon sold enough high-performance headphones that everyone attending the last three Super Bowls could grab a set and rock out.

Amazon Grocery sold enough coffee to give each resident of the highly caffeinated city of Seattle a cup per day for two months.

Amazon sold enough Casio G-Shock watches to outfit every Kanye West fan attending the 2008 Glow in the Dark Tour concert at Madison Square Garden, N.Y.

Amazon sold enough Coldplay CDs that laid side by side they’d stretch from Seattle to Violet Hill (a street in London and the album’s first single) and more than halfway back.

Amazon sold enough Munchkin Mozart Magic Cubes to fill every seat in the Sydney Opera House five times over.

Amazon sold enough Wild Planet Hyper Dash games that the total weight of sets sold is over 81,000 pounds — almost the size of two 747 aircrafts.

Amazon sold enough Spalding basketballs to fill three C-130 cargo planes.

The last One-Day Prime order placed on Dec. 23 in time for Christmas delivery contained a “Dora the Explorer” micro-shell helmet, and was delivered to Sherman Oaks, California on Dec. 24.

The last Same-Day Prime order placed at 7:25 a.m. on Dec. 24 in time for Christmas delivery contained a Pinzon 400-thread-count, 100 percent Egyptian Cotton Hemstitch full sheet set, and was delivered at 6:12 p.m. to Las Vegas, Nevada on Dec. 24.

Amazon.com, Inc. (Amazon.com) operates retail Websites, which enables its consumer customers to find and discover anything they might want to buy online. [SM]

Shari

Samen
12-26-2008, 04:05 PM
U.S. Consumers increased Spending by 64% if not for big discounts, no wait a second, how did the math go -70% + -4% = U.S. Consumers Got 64 % more goods made in China while spending 70% les and the retailers only made -4% spending what amount off money for the products with a profit margin of 64% I'm confused :D

From Bloomberg
Discounts of 70 percent off or more by Macy’s Inc., AnnTaylor Stores Inc. and other retailers failed to prevent a spending drop of as much as 4 percent...
http://www.bloomberg.com/apps/news?pid=20601087&sid=aYiTruh_k73o&refer=home

BirdGuano
12-27-2008, 02:22 AM
Record sales do not equal PROFITS.

Do not confuse the two SEPARATE numbers. :D

Especially at a 70% discount.:eek:

:D

Q1 will be VERY "interesting" for public companies.

vince08
12-27-2008, 06:48 AM
Price cuts 'won't boost retailers' But the heavy discounting - including cuts of up to 70% - might not be enough to boost the ailing retail sector, analysts have warned.

Across Britain, department stores and shopping centres on Friday reported throngs of eager bargain hunters - on London's Oxford Street some even braved the cold at 2am to secure a pole position outside Selfridges.

However, with retailers slashing prices, a greater footfall might not equal a greater profit, analysts warned.

Jonathan de Mello, director of retail consultancy with business analyst Experian, said the overall picture might not be as positive as retailers were making out.

He said: "It looks very strong with queues out the door in all the big stores and shopping centres but it could have been better and might actually be worse than last year.

"Christmas Day was very good for online sales, and many people were shopping online instead of venturing out yesterday. Even if footfall is up on last year because of the big reductions and discounts, footfall would actually need to double because the profit margin is lower."

Some of the high street's big names begin their sales on Saturday including John Lewis and Marks & Spencer which is opening some stores at 6am and promising discounts of up to 50%.

Stephen Robertson, director general of the British Retail Consortium, was pessimistic about how successful the sales would be. He said: "We'll see the full December figures in a few weeks, but they won't be pretty.

"Few retailers have not been hit by the slowdown but some harder than others. Discounts and promotions on a scale unprecedented for the run-up to Christmas, combined with weak sales, have put margins under severe pressure."



http://uk.news.yahoo.com/21/20081227/tuk-price-cuts-won-t-boost-retailers-6323e80.html

BirdGuano
12-27-2008, 12:16 PM
He said: "It looks very strong with queues out the door in all the big stores and shopping centres but it could have been better and might actually be worse than last year.

It's called getting press and generating a marketing buzz.

Psychological warfare on the consumer. :D