Retailers Dream of a Black Day-After Christmas

Discussion
Dec 27, 2005
George Anderson

By George Anderson


Depending on the locale and the report you were reading, shoppers either turned out in droves at stores yesterday or chose to do something other than return items and cash in gift cards.


For those with new found gift card spending power following Christmas, there were plenty of deals to be had as retailers looked to sell off holiday season merchandise and, in the case of retailers such as Coach, Target and American Eagle Outfitters, get an early start on selling the new spring merchandise.


Marshal Cohen, chief analyst at NPD Group, told The Associated Press, “Retailers have recognized that December has 31 days.” When all is said and done for the holiday shopping season (Nov. and Dec.), Mr. Cohen estimates same-store sales will be up about three percent across the board.


Moderator’s Comment: What is your anecdotal assessment of how stores were doing in your area yesterday? Is the growing popularity of gift cards, in some
fundamental way, changing the holiday retail season? If so, what does it mean for retailers?

George Anderson – Moderator

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9 Comments on "Retailers Dream of a Black Day-After Christmas"


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Joseph Peter
Guest
Joseph Peter
15 years 2 months ago

Marshall Field’s on State Street in Chicago was jammed wall to wall with people trying to get their hands on Field’s branded merchandise since it’s going to be wiped out by Macy’s.

TJ Maxx and Filene’s Basement were extremely busy down the street as well.

Art Williams
Guest
Art Williams
15 years 2 months ago

With only one gift to return, no gift cards burning a hole in our pockets, and not seeing any sale ads that were overwhelming, we stayed away from the major shopping areas yesterday. But on the one trip we did make, the traffic was very heavy as we neared the mall area. Local TV reports indicated that the stores were quite busy with bargain hunters first and gift returners second. They further theorized that the gift returners would be heavier after next weekend, but to be careful since so many retailers have changed the time limits on their returns.

Other than a few electronic items, it didn’t seem like there were as many “have to have” items this year. Maybe that’s my age showing but we just didn’t get the sense that there were as many items that motivated you this year.

Mark Lilien
Guest
15 years 2 months ago

Gift cards are a gift to retailers! They are a tool for selling the leftover post-holiday markdowns, they reduce customer returns, and the cash flow helps, too. Customer traffic in Northern NJ was not overwhelming.

Jeff Schaengold
Guest
Jeff Schaengold
15 years 2 months ago
This is the first year we’re viewing a major shift in the holiday selling calendar. In the post-world war II economy, retailers set their sights on the last week of November to the last week of December as the ‘selling’ season. We are now seeing that the impact of online retailing and gift cards is reducing the brick and mortar (B&M) retailer to the third week of December. How is this affecting the post-Xmas selling period ? The day after Xmas was very gray, and in many cases a red day. While Circuit City boasted a double digit same store increase this season, it was mostly attributed to a poor 2004 Xmas and ‘give-away’ prices for 2005. The majority of gifts received from online sources do not translate to exchanges in the last week of December. Whether we subscribe to the view that online retailing is 15% of total December sales or over 20% of total gift sales, online purchased gift sales are now excluded from the post-Xmas B&M retail store sales. As for gift… Read more »
Doug Fleener
Guest
15 years 2 months ago

Since I did a shopping trip on Christmas Eve I stayed away from the mall yesterday. What was interesting is that my wife went down to our town center and she was almost shocked to see how many stores were actually closed. The local store actually was closed on the day after. I’m sure these are also the same independent retailers who will moan and complain about the big box retailers.

I see two things that have completely changed the holiday season. First, online retailers taking orders up to late December 23rd. Second, gift cards. This new season, post holiday is definitely another make or break time. I know a lot of retailers who fell short in November and had a decent December so far. The next few weeks can truly determine whether it’s an okay year or a great year.

Richard J. George, Ph.D.
Guest
15 years 2 months ago

Gift cards are becoming a preferred alternative to gift returns and the dreaded “re-gifting.” The emergence of specialty retailer gift cards allow us to give mom a gift card from “Bath and Body Works” and dad a gift card from “Home Depot.” These retailer based cards express a greater level of giver involvement than simply giving an American Express gift card.

For retailers they will continue to be a boom. In addition to the obvious cash flow and slippage benefits, such cards should reduce the probability of gift returns with their associated restocking and damaged merchandise costs.

Karen Kingsley
Guest
Karen Kingsley
15 years 2 months ago

The Apple store had lines snaking out the front door – I expect that was mostly new iPod owners buying accessories and working with the “genius” helpers Apple offers.

Other than that, things were busy, but not insane, as nearly as I can tell.

I have heard tell (myself included) of people who have bought the things they wanted for themselves online in the past two days given the heavy discounting and e-mail alerts provided by etailers. I will be interested to hear how this business does this week.

David HARVISON
Guest
David HARVISON
15 years 2 months ago

The WSJ has two articles on Retail spending rates that relate to today’s topic. One notes that sales were fine but not strong at 4 to 4.5 %. The other uses a credit card survey report which came in at robust 8%. The differences are two sources that will have increasing effects over the next few years:

1. Gift cards which do not have to be redeemed in the next week but often push purchases into the next year, thus “smoothing” the Christmas effect

2. Online buying which is up 24% – at 3 to 4 percent of total spending, this amounts to 1% increase in the total spending levels, which should ease the worry over lower store increase sales rates.

Desane Blaney
Guest
Desane Blaney
15 years 2 months ago

Union Square in San Francisco was hopping with shoppers. Saks Fifth Avenue had the most aggressive mark-downs on high-end merchandise offering 50% off the last price from 8 a.m. to 11 a.m.; then 40% thereafter. The shoe salon was definitely “every lady for herself.” Neiman’s offered a paltry 25% discount which explained why the majority of shopping bags carried throughout the day and day after were from Saks.

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