Official SHORT SELLERS THREAD.

Last-Minute Shoppers Flock to Malls


Updated: Mon, Dec 24 6:35 PM EST

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A book store at the Mall of America in Bloomington, Minn., was one of the busier stores as last-minute shoppers flocked to the nation's malls to take advantage of discounts Monday, Dec. 24, 2001. (AP)


By ANNE D'INNOCENZIO, AP Business Writer
NEW YORK (AP) - Shoppers flocked to malls Monday to take advantage of deep discounts the day before Christmas, but crowds were thinner than some merchants had expected and the mood was more subdued, casting a cloud on the end of a shopping season that's already expected to be the weakest in at least a decade.

Unseasonably warm weather, a widespread sense of sadness in the aftermath of the Sept. 11 terrorist attacks and economic jitters have kept customers away from stores, whose sales were already hurt by a consumer spending slowdown over the past year.

Consequently, merchants are desperately counting on more first-time procrastinators like Marcia Maxwell from Brooklyn, N.Y., and Pat Sterle from West Bend, Wis., both of whom hadn't made holiday shopping a top priority earlier in the season.

"I just wasn't in the mood," said Maxwell, who went out for the first time this past weekend, buying software games for PlayStation2 and boardgames at Toys R Us as well as sweaters at Banana Republic. She planned to head back out to Toys R Us to pick up a few more toys.

"All of a sudden it wasn't so important to get the shopping done," said Sterle, who was one of the few shoppers at a Target store in Milwaukee on Monday morning.

Even seasoned procrastinators noticed that things were different this year.

"Oh, yeah, I'm a procrastinator. But it seems like my procrastination has paid off this year," said Judy Cahalan, from Lakeville, Minn., pointing out that the crowds at Bloomington, Minn.-based Mall of America, the nation's biggest mall, were thinner than she anticipated. Political and economic uncertainties have dampened her overall enthusiasm for the season, she said.

Christmas Eve day is not typically a big sales generator, accounting for less than 4 percent of overall holiday sales, according to C. Britt Beemer, chairman of Charleston, S.C.-based America's Research Group. But he noted that the holiday will be even less significant this year because more people will be focused on attending church services and spending more time with family.

The tempered spending follows a disappointing sales performance and shopper turnout at the nation's malls this weekend, despite heavy discounting and advertising blitzes. The weekend before Christmas is usually one of the biggest shopping periods of the season.

Merchants typically see a sales surge in the final seven days before Christmas, whose share has been increasing over the past decade. However, customers remained frugal, scouring for bargains and continuing to focus on home-related merchandise, like DVD players, game consoles and home furnishings.

Consequently, Jeff Feiner, managing director of Lehman Brothers, now believes that most of the 22 retailers he tracks will not meet their most modest sales forecasts. Furthermore, even for those that do, their sales will come at the expense of heavy discounting, further eroding profit margins.


He added that his holiday forecast of a 2 percent sales gain may be now a "little too optimistic." He now expects that retailers' profits will probably be down as much as 5 percent to 10 percent, worse than the 3 percent to 5 percent he had originally anticipated.

Still, Feiner believes that consumer spending will improve, particularly in the second half of 2002. But any improvement then would be too late for retailers, as frugality and a somber mood continues to define this Christmas season.

"I don't plan to spend as much. I am worried about the economy," said Maxwell, who is limiting her spending to $1,000 this holiday, about $500 less than a year ago.

"Everything is on sale. I wouldn't say I'm spending more than last year, it's probably about the same, but people are getting nicer gifts because of the sales," said Julie Hobbs, from Salt Lake City, who was buying a book for a friend and some Olympic pins for her nieces and nephews at Salt Lake City's Crossroads Mall.

With many retailers realizing that the pre-Christmas season is a wash-out, merchants are now turning to the last week of December to recoup some of the lost holiday sales. Beemer expects even deeper discounts to clear out merchandise, making way for spring receipts. In fact, some merchants like Eddie Bauer was offering post-Christmas discounts on Christmas Eve day.

Meanwhile, Karen MacDonald, a spokeswoman at mall operator Bloomfield Hills, Mich.-based Taubman Centers, is heartened by the double-digit increase in sales in gift certificates this holiday over a year ago.

"This period could very well be more important than a year ago," she said.


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