• Cecile Corral

2000 holiday sales fall short for retailers

NEW YORK -Too cold to leave the house and too strapped for spending money because of soaring energy bills, consumers' setbacks resulted in not-so-merry sales for retailers this holiday.

That is, if you compare this year's holiday sales to last year's robust numbers.

"But (this year's holiday sales were) nothing bad," said Pamela Rucker, spokeswoman for the Washington, D.C.-based National Retail Federation. "Not bad at all."

NRF last week estimated that during November and December, retail sales saw a healthy 5 percent increase over last year's 7.3 percent increase, with total holiday sales estimated at about $190 billion to $195 billion, Rucker said. Exact results were not available at press time. NRF's counterpart, the International Mass Retail Association, projected a 2 to 3 percent gain over last year's same period in same store sales.

Consumers stood to gain the most, especially last minute shoppers. Deeper than usual discounts before the Dec. 25 deadline and still deeper discounts the week after Christmas ran rampant on all retail levels. Retailers, however, can expect to see overall retail profits suffer as a result, Rucker said.

On-line retailers, who like their brick-and-mortar counterparts offered their customers deep discounts plus other perks like free shipping, doubled their sales in the to $10 billion to $12 billion range.

"The Internet is more and more becoming a mainstream tool for consumers to shop, and its astronomical rate of growth will continue for a while longer," Rucker said.

Among traditional retailers, discounters were the biggest winners this holiday, NRF reported, even though severe weather conditions in the mideastern, midwestern and eastern states kept shoppers at home.

"Weather did hamper our sales in some parts of the country," said Wal-Mart spokesman Rob Phillips.

The beginning of the holiday season proved to be rough for Wal-Mart, which failed to meet its projected sales results for three consecutive weeks in December. Last year Wal-Mart saw a 6.3 percent increase in comparable sales in the fourth quarter. This year, it expects a 3 percent to 5 percent increase, "closer to the lower end of that," Phillips added.

Kmart experienced similar problems at stores. To compensate for sluggish traffic and sales at the start of the season, the store opened its doors for 86 uninterrupted hours from 6 a.m. Dec. 21 to 8 p.m. Dec. 24 in hopes of attracting previously inconvenienced and last-minute customers. Keeping up the momentum on the week after Christmas, Kmart drastically marked down prices for its "dollar sale" and its Martha Stewart white sale.

"Obviously, the weather has been very difficult and has affected our sales," said Kmart spokeswoman Mary Lorencz, who added that Kmart does not reveal specific results. "Generally, we are below our plan and weather has hampered up the Mid-east and the East. But we did well in the West Coast."

While most of December was a disappointment for retailers, the last two shopping days before Christmas helped speed up-if only slightly-the month-long slump. Then the week after the holiday, which typically makes up 10 to 12 percent of total holiday sales, further helped retailers see a small but steady increase for total holiday sales. NRF reported that on Dec. 23 about 90 million people shopped at department stores and 72.1 million shopped at malls-6.7 percent more mall shoppers than reported on the day after Thanksgiving, typically the biggest shopping day.

Saturday, Dec. 23, "was the busiest shopping day of the entire year," Rucker said. "And it was definitely one of the biggest turnouts in the last couple of years."

Federated Department Stores, which does not release its holiday sales results until later in January, reported that its comparable store sales for December were 1 to 2 percent, falling slightly short of its original expectation of 3 percent. For the five-week period from Nov. 26 to Dec. 30, "week four was strong and exceeded our expectations nicely," according to the company's weekly sales update hotline. But it was not strong enough to offset the weaknesses of weeks two and three, which were both "a disappointment."

The picture was brighter at mid-tier stores. At Sears, home textiles made up a large part of its holiday promotional business, and "promotional business is doing very well," said Mark Grand, vp of home fashions.

More specifically, Grand said, flannel sheet sold "very well," as did blankets and promotional bed coverings. Accent rugs, which were not promotional items, did "comparatively well." But decorative pillows and bath products did not sell well at Sears, he added.

Sears' sales results were not available at press time, but Grand expects the store to see a 2 to 3 percent same store sales increase.

"In general, the first couple of weeks in December were slower than we expected," Grand said. "But for home textiles, the week after Christmas is very, very important for us."

A consumer study conducted by IMRA revealed that shoppers spent mainly on digital items like DVD players and personal data assistants, and toys, especially educational toys.

Wal-Mart reported that from Dec. 18 to 22 its strongest product categories were infant and toddler items, pet supplies, florals, shoes, seasonal items, household paper products and automotive products, as well as several grocery goods. At its Sam's Club stores during the same period, the best-selling products were health and beauty aids, florals, men's and women's fashions, basic apparel, small and major appliances, automotive products, tires, seasonal items and optical products.

At Kmart, the Martha Stewart Everyday kitchen line that debuted last fall "led our home sales and did very well," said Laura Mahle, manager publicity for the home department.

Also through its consumer study, IMRA found that last year consumers spent more than $1,000 per household for holiday items - a 20 percent excess of what they originally planned to spend. This year, consumers spent about $848 per household-more than 15 percent less than they spent in 1999.

Cecile CorralCecile Corral | Senior Product Editor, Home & Textiles Today

Cecile B. Corral has been a product editor with Home Textiles Today since late 2000. She covers the area and accent rug, kitchen textiles, table linens, beach towels, decorative bath and decorative pillow categories, as well as some retail subjects.

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