Dec 26, 2007 10:54 am US/Eastern
Shoppers Hunt For Post-Christmas Sales
Gift Cards Fuel Potential 4th Quarter Profits
Analysts Recommend Redeeming Gift Cards Before January
BOSTON (WBZ) ―
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The post-Christmas season has become more important with the increasing popularity of gift cards.
CBS
Retailers ushered in the post-Christmas shopping season Wednesday by opening earlier than ever and slashing prices, with hopes that bargain hunters and gift-card splurgers will prop up what has so far been an unimpressive showing by consumers.
Kohl's department store in Medford opened its doors at 6 a.m. and according to assistant store manager Dan Glickman, much of the store's merchandise was on sale for up to 70 percent off.
Glenda Melire of Somerville found a $40 pair of pants marked down to just $4.
Target Corp. warned late Monday that its sales at established stores might decline for December, while a broad gauge of consumer spending released by Mastercard Inc., which includes estimates for spending by check and cash, showed an increase of 3.6 percent from Thanksgiving to Christmas, compared to a 6.6 percent gain in the year-ago period. Excluding gasoline and auto sales, that figure was a slim 2.4 percent gain.
So stores are again trying to position themselves to extend the holiday season.
Toys "R" Us Inc., which opened at 8 a.m. on Wednesday, two hours earlier than last year, is offering 40 percent price cuts on all MP3 and iPod accessories. Macy's Inc. is offering 50 percent to 75 percent off cashmere sweaters, while Saks Fifth Ave. cut prices on fur coats by 40 percent to 60 percent.
Retail analysts recommending shoppers redeem gift cards before January in order to make the most of their money, CBS station WCBS-TV in New York reports.
"More retailers want to bring in new goods for the month of January and sell those goods at full price," retail industry analyst Dana Telsey told WCBS-TV.
Store manager Joe St. Rock said the store sold about $500,000 in gift cards in December, and many would be redeemed in the next two or three weeks. He said the store had a good Christmas season, with practical items like clothing the best sellers.
"All the gloom and doom that's been predicted didn't seem to pan out, at least not here at Kohl's in Lisbon, anyway," St. Rock said.
Samantha Williams, with her bundled 7-week-old daughter, arrived early Wednesday to exchange baby clothes. Waking early was better than fighting lines later, she said.
The post-Christmas season has become more important with the increasing popularity of gift cards. Gift card sales are only recorded on retailers' balance sheet when cards are redeemed.
According to the National Retail Federation, consumers were expected to spend a total of $26.3 billion in gift cards this holiday season, up 42 percent from $18.5 billion in 2005.
ShopperTrak RCT Corp. said that the week after Christmas accounts for about 16 percent of total holiday sales.
"This is going to be a more important chunk of business than most people realize," said Scott Krugman, a spokesman at NRF.
Marshal Cohen, chief industry analyst at NPD Group Inc., a market research firm, agreed, noting that when the industry looks at the holiday results, they need to include January business.
"When we take a look at the results of this holiday retail season, it will be important to remember that the rules have changed and so should the way we read the success of the holiday," Cohen said.
(© 2009 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
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