NEW YORK — The nation’s retailers slashed prices further Wednesday in hopes that a post-Christmas shopping rush will salvage holiday sales that, so far, have fallen below even modest expectations. In particular, they are waiting for legions of shoppers armed with gift cards to grab bargains and buy new merchandise still on store shelves.
Merchants in past years have received a late bounce during big clearance markdowns and they find themselves again in the position of hoping that bargain-hunting consumers will come through in the end.
Investors, however, grew pessimistic about this holiday season as well as the financial well-being of consumers amid a challenging economic environment. Shares of most retailers fell Wednesday, led by Macy’s Inc. which sank as much as 5 percent in afternoon trading.
“Shoppers are thinking twice about what they are buying,” said Jennifer Black, president of Jennifer Black &Associates, an equity research company in Lake Oswego, Ore. “There’s a feeling of worry.”
Black, along with other analysts, made the rounds at malls in Oregon and New Jersey, noting that even with gift cards, shoppers remained tightfisted Wednesday, focusing on bargains despite fresh offerings from merchants.
“My son gave me gift cards for clothes, and I get up with the birds, so I figured I’d get the most with my money,” said Susan Depetris, who was loading discounted pants and sweaters into a cart at Kohl’s in Medford, Mass. She didn’t plan on looking for gifts for anyone else. She had just one person on her mind while she shopped — herself.
The International Council of Shopping Centers said Wednesday that same-store sales, or sales at stores opened at least a year during the November-December period, are coming in just below already slim projections for a 2.5 percent gain, though it said that a post-Christmas buying splurge could erase that shortfall. That contrasts to a more upbeat assessment from its chief economist Michael Niemira, following the weekend’s spending surge, who predicted that holiday sales could at least meet forecasts.
Target Corp. warned late Monday that its same-store sales might decline for December, while a broad gauge of consumer spending released by MasterCard Advisors, a division of the credit card company, which includes estimates for spending by check and cash, reported on Tuesday an increase of 3.6 percent from Thanksgiving to Christmas. That compared with a 6.6 percent gain in the year-ago period.
“The ingredients were not there for a blockbuster season,” said Michael McNamara, vice president, research and analysis of MasterCard Advisors. “And retailers in many respects got the most out of the season that they could based on the environment.”
Shoppers jammed stores at the start of the season, but held out for deals through most of December only to return for a last-minute spending spree when the bargains were even better. Higher gasoline prices, an escalating credit crisis and a housing slump made shoppers cautious, which has manifested itself in weakening sales growth throughout the year, McNamara said.
To spur business, stores early on were aggressive with discounting, raising concern over stores’ profit picture during this crucial period. The holiday season accounts for up to 30 percent of annual stores sales. For toy sellers, holiday business accounts for as much as 50 percent.
A better tally of how retailers fared won’t arrive until at least Jan. 10, when major merchants report final same-store sales figures for December. Merchants are slated to report fourth- quarter profits in February.
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