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Published: Wednesday, 12/24/2008

Stores plug away, down to wire

ASSOCIATED PRESS
Growing numbers of retailers, including several in Manhattan, are staying open all night as Christmas nears. Growing numbers of retailers, including several in Manhattan, are staying open all night as Christmas nears.
MARK LENNIHAN / AP Enlarge

NEW YORK - The nation's stores are pulling all-nighters and deepening discounts in the final hours before Christmas, trying to draw in all the shoppers they can.

But yesterday, the International Council of Shopping Centers revised its projection for declines in sales in November and December, to as much as 2 percent from the previously projected 1 percent. That would this make Christmas sales season the worst in at least four decades.

In Christmases past, the retail industry has depended on last-minute shoppers, along with those pulled in by 24-hour shopping options, to help save the season. But this year, customers worried about their jobs and retirement funds have been pulling back their spending.

A lot is at stake. The holiday shopping season accounts for as much as 40 percent of annual revenues for many retailers. Last year, the last five full shopping days - Dec. 19 through Dec. 23 - pulled in nearly 20 percent of holiday sales, according to ShopperTrak. The first week after Christmas produces about 15 percent of total holiday sales, according to Michael Niemira, chief economist at the shopping centers group.

Excluding Wal-Mart Stores Inc., same-store sales are expected to fall in a range of 6.5 percent to 7 percent. Same-store sales are sales at stores opened at least a year and are considered a key indicator of a retailer's health.

Meanwhile, ShopperTrak RCT Corp., which measures traffic and total retail sales at more than 50,000 outlets, said yesterday that total sales for the Saturday before Christmas were up 0.5 percent and customer count dropped 17 percent compared with a year earlier. The Saturday before Christmas is usually the second-biggest day of the season.

Marshal Cohen, chief industry analyst at market research firm NPD Group Inc., and C. Britt Beemer, chairman of America's Research Group, both noted that crowds were thinner this week than at the same time last year.

Still, they said offering marathon shopping hours in the season's finale makes sense because the extra labor costs are minimal compared with the goodwill that stores generate by offering a convenience to time-starved shoppers.

Ed Schmults, chief executive of toy retailer FAO Schwarz, said that the company's two main stores, one each in Manhattan and in Las Vegas, are staying open Christmas Day for the second year in a row.

"We get a lot of appreciation from our customers," he said.

He said business has been stronger in the final days of the season compared with the same time last year.

But he acknowledged that the surge won't be enough to offset a drop in overall holiday sales, which have been tracking below last year since late October.

What worries him and others is January and beyond. Stores may not be able to count on the post-Christmas shopping boost traditionally spurred by shoppers redeeming gift cards: Sales of the cards have been disappointing this year.

Karen MacDonald, a spokesman at mall operator Taubman Centers Inc., said gift card sales are below last year's.

Mr. Beemer estimated that they are about 30 percent below year-ago levels.

Such woes can benefit shoppers. Dan de Grandpre, editor-in-chief of dealnews.com, which tracks discounts both online and at regular stores, said stores are inundated with merchandise. That means wide choices among the piles of deeply discounted items after Christmas.



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