Retailers hope for a post-Christmas sales bumpby Martin Moylan, Minnesota Public Radio
Retailers are scrambling in these final days of the year to try to salvage what has been a dismal shopping season for them. Many stores are cutting prices 30 to 70 percent, trying to boost sales. It seems there's really nothing retailers can do to avoid their worst holiday shopping season in decades.
Bloomington, Minn. — Retailers at the Mall of America -- like their counterparts across the state and nation -- are hoping they'll get a post-Christmas sales kick to spruce up what has been a very sluggish holiday season.
Indeed, some shoppers are opening their wallets, seduced by deep discounts. Dannette Coleman of Eagan was impressed with the after-Christmas deals she found.
"You're seeing stores that were marked down 50 percent before the holidays," she said. "Now they're an additional 40 percent off that. So, it's definitely a good day to get a good deal. You just can't seem to get away from the sales, which is good thing. But I think it really shows how tough this Christmas was."
Other shoppers expect even better deals. Kristy McClellan of Burnsville wasn't blown away by sale prices.
"I don't think it's any better than in past years, personally," she said. "Fifty percent off. We got some wrapping paper and a few extra gifts for ourselves. It's good, but I thought it'd be better."
Cordell McClain of Maplewood had a similar assessment.
"The deals before Christmas this time were pretty good -- 50 percent off all that kind of good stuff," he said. "I'm seeing the same deals I've seen before Christmas." Whether they're about the same deals that were out there before Christmas or not, they are substantial deals.
After Christmas, Macy's, for instance, slashed prices for diamond earrings in 14-carat white gold by more than 60 percent. Select Comfort cut prices for some beds by 50 percent. And Best But offered three years no-interest financing on big-screen TVs.
Such discounts are coming as the International Council of Shopping Centers continues to project the worst holiday sales decline for retailers in at least four decades.
The council expects sales at stores open at least a year may drop as much as 2 percent in November and December. That would be the steepest decline since at least 1969.
Minneapolis-based Target saw its November same-store sales fall about 10 percent. Richfield-based Best Buy saw its sales fall about 5 percent from September to the end of November. The two retailers' December sales are expected to be less than stellar, too.
Retail consultant Howard Davidowitz says even low, low prices can't get most consumers to spend on anything but essentials.
"We're going through one of the worst seasons in 50 years," he said. "With the consumer completely underwater. Record consumer bankruptcies. An explosion in unemployment."
More than a dozen retailers, including Circuit City, Linens 'n Things, Sharper Image and Steve & Barry's have sought bankruptcy protection this year. Meanwhile, Ann Taylor, Talbots and Sears are among chains shuttering underperforming locations.
Davidowitz expects massive store closings. "We're going to close 12,000 stores," he said. "We've had record bankruptcies this year. We'll have a lot more next year than we had this year. The worst is yet to come for retail."
Retailers, of course, certainly hope the worst is over. Gary Ferns runs Heather's Perfume at the Mall of America. He was encouraged to see throngs of shoppers show up at the mall the day after Christmas.
"Every store, especially the big box department stores, have like 50, 70 percent off," he said. "I think that's drawing the customers in."
But he's well aware many retailers -- big and small -- are struggling to stay in business.
"A lot of stores have been closing down," he said.
Small shop owners at the mall are thinking hard about how they can get through these tough economic times.
Osh Kid runs a kiosk at the mall, selling hands-free devices for cell phones. He's thinking he'll have to follow the same business strategy as big industry players when it comes to consumers.
"They're very cautious right now as far as their spending," he said. "I'm thinking I might just have to reduce the price to get better business, I guess."
But in this economy that's not a sure prescription for profit -- or even survival.
- Morning Edition, 12/30/2008, 6:20 a.m.