As many Americans nursed full bellies on the morning after
Thanksgiving, they also gave merchants an early start this holiday
shopping season. While many lined stores early Friday morning,
sales nonetheless fell short of Wall Street’s ambitious
expectations.
Nationwide conglomerates, such J.C. Penny and Sears, Roebuck
posted increased sales as they initiated a variety of special
promotional offers and extended hours of operation. Wal-Mart, on
the other hand, said sales were less than expected and lowered its
predictions for November.
“Friday overall was strong, but Saturday was weak and
disappointing, so together it was only a modest two-day
performance,” said Michael Niemira, chief economist at
International Council of Shopping Centers. “˜”˜Still, I
continue to believe that this is not a bellwether for how the
season will end up.”
In addition, Niemira said the first weekend of the season is not
as significant as the last 10 days before Christmas and predicted a
sales gain of 3 to 4 percent for the holiday period.
“I didn’t think we would have a real stellar
Thanksgiving “ said UCLA Anderson School of Management
Professor Michael Bazdarich and added “I don’t think
we’ll have a real stellar Christmas either.”
There are a variety of reasons that underlie the caution
economists are expressing over the season, including weak
employment statistics and the poor weekend sales of industry-leader
Wal-Mart.
“˜”˜Wal-Mart was a big loser because they didn’t
get the same numbers of early bird shoppers as they did a year
ago,” said C. Britt Beemer, chairman of
America’s Research Group.
Officials from Wal-Mart said in their defense that they
didn’t offer as many discounts as last year.
“˜”˜Wal-Mart is getting serious about profits, and
they’re not as obsessed about market share, which means they
are getting careful about sales promotions and inventories ““
things that impact expenses and cash flow,” Richard
Hastings, a retail analyst at Bernard Sands said. “˜”˜The
retailers that won this weekend were the ones that were super
aggressive in special purchases and special
pricing.”
The Best Buy located in the Village, offered a 10 percent
discount on select digital cameras as well as video games for
$9.99. Along with special discounts, some stores such as
Marshall’s opened at 5:30 a.m. on the morning after
Thanksgiving.
The combination of such marketing tactics and the fact that
there aren’t any must-have apparel or toys this season, may
lead to an increase in sales for stores such as Best Buy and
Circuit City.
Another lucrative avenue this Christmas season may be online
shopping, as companies such as Amazon.com have posted higher than
expected sales.
Online sales, excluding travel, increased by 100 percent to $133
million on Thanksgiving Day compared to the same day last year,
said Dan Hess, senior vice president at comScore, an Internet
research company. On Nov. 26, online sales hit $250 million, up 41
percent from a year ago.
“We certainly expected a strong performance during the
holiday weekend, but these are impressive figures,”
Hess said.
For example, Melissa Payner, president and chief executive of
Bluefly.com, an online merchant of discounted designer fashions and
accessories, posted a double-digit increase in sales during the
Wednesday through Sunday period from a year earlier.
In 2003, the online merchant attracted many consumers with a
promotion on Prada handbags and wallets on Thanksgiving Day. This
year, the company offered a larger variety of Prada merchandise in
a bid to attract more customers.
“For the first time, we really participated in the
Thanksgiving weekend,” Payner said.
“˜”˜Prior to that, there was a belief that customers just
went to the stores.”
But, with all the hopeful predictions and statistics being
thrown around, UCLA students may still be less than eager to
spend.
Factors such as increasing student fees and fuel prices may lead
students to be more cautious this holiday season, UCLA economists
say.
“Underneath it all, we’ve got a consumer sector
that’s pretty heavy in debt,” said Bazdarich, who is
also a senior economist for the UCLA Anderson Forecast.
In addition to consumer debt, factors such as slow job growth
and rising fuel prices have led to Bazdarich’s prediction
that this holiday season won’t be as lucrative as some on
Wall Street would hope.
“Retailers make most of their money this season so they
want the predictions to be good. We just have to see what happens
when the dust settles,” he added.
And in terms of using the holiday shopping season as an
indicator for economic strength of 2005, Bazdarich said there is
little point in doing so.
With reports from Bruin wire services.