(REUTERS) U.S. retailers face tepid pre-Christmas weekend
U.S. retailers face tepid pre-Christmas weekend
By Ellis Mnyandu
NEW YORK, Dec 21 (Reuters) - U.S. retailers have slashed
prices and are staying open late this weekend, the last before
Christmas, in hopes of a big rush of last-minute buying from
shoppers, who have been unusually tight-fisted this year.
But analysts said on Friday that even if the markdowns and
extended store hours boost store traffic, the discounts are so
deep that prospects of a recovery in profits are dim.
"I don't see anything that retailers are doing
significantly swaying people's decisions at this point," said
Russell Jones, vice president retail consulting at Cap Gemini
Ernst & Young.
"There's been so many sales and discounting started early
enough that at this point I don't think people will be
persuaded to shop based on the new discounts that are being
offered," he added.
Retailers, particularly those that sell apparel and luxury
items like jewelry, suffered lousy sales last year and the
attacks of Sept. 11 hit consumer confidence going into this
year's holiday shopping season.
CHOOSY SHOPPERS
But, as Christmas grows closer, shoppers continue to be
choosy in their spending, concentrating mainly on retailers
like Wal-Mart Stores Inc. , which sells cut-price food,
household detergents, medicine and clothing.
That spending shift has in turn forced retailers like the
nation's largest clothing chain, Gap Inc. , to rely on
deep markdowns in order to liquidate inventory and get shoppers
spending.
Holiday purchases account for as much as one-quarter of
many retailers' annual sales, but with the holiday season
having started slow, a single weekend is seen less likely to
provide any comfort.
"It's obviously been a difficult year. I don't think the
pattern of this being a very difficult period will change on
the strength of just one weekend," Robert Kerson, president of
Korn/Ferry International's Global Retail/Fashion Group.
"The apparel business will continue to be under pressure,"
he said, adding that most retailers may already be focusing on
plans for after Christmas and the spring.
EXTENDED STORE HOURS
Sears, Roebuck and Co. -- the nation's fourth-largest
retailer -- and value-priced retailer Kohl's Corp.
announced on Friday that they have scheduled longer store hours
to capture any last-minute shopping rush.
A spokesman for Kohl's, which is based in Menomonee Falls,
Wisconsin, said it will open its stores on Saturday from 7 a.m.
to midnight and carry 50 percent discounts on items like
selected outerwear, footwear and up to 60 percent off fine
jewelry.
A Sears spokeswoman said its stores will open from 7 a.m.
to 11 p.m. on Saturday.
"We are hopeful that this will be a very solid weekend,"
she said, but said it was still on track for a "decrease" in
December same-store sales from "low to mid-single digits".
((Ellis Mnyandu, New York Equities Desk (646) 223 6085,
ellis.mnyandu@reuters.com))
REUTERS
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