Retailers hope for post holiday shopping spree
Published 6:19 pm Tuesday, December 26, 2006
It’s clearly a busy day at Target when no carts are available in the front of the store.
That was the type of crowd shoppers were greeted with Tuesday as the rush to return and spend gift cards began.
“We opened at 7 a.m. expecting a long line of people waiting to return gifts, but it didn’t really pick up until later in the day,” executive manager of Target in Port Arthur, Shauntel Perreau, said. “There really aren’t as many people returning gifts as we expected,” she added.
Many of the nation’s retailers were ushering in the post-Christmas shopping season by slashing prices even more on holiday items and stocking up on fresh new merchandise.
“Most of the people today are just looking to take advantage of the post-holiday bargains,” Perreau said.
With a cart full of wrapping paper and Christmas decorations, Ricardo Mendoza, of San Marcos, paused before leaving Target to make sure his purchases rang up 50 percent off.
“I came to get some holiday stuff on sale,” said the visiting out of towner.
With the 2006 pre-Christmas season turning out to be challenging, the nation’s merchants are hoping that shoppers, armed with gift cards, will spend freely, snapping up discounted items as well as picking up full-priced merchandise, to boost business in December and in the fourth-quarter, after the 2006 pre-Christmas period fell short of expectations.
“I did get some gift cards, but I’ll probably save those for later,” Cynthia Smith of Austin said. “Today I’m looking for the big sales on toys to put away for birthdays,” she said.
After a stronger-than-expected turnout on Black Friday, the day after Thanksgiving, stores struggled through the first two weeks of December, but did get a late-buying sales surge in the final days of the pre-Christmas season, although it was not enough to meet holiday sales goals.
But retailers, who expect to bring in a sizable part of their holiday sales after Christmas, were hoping that bargain-hunters would save the season for them, as they have done in past years, and that consumers redeeming gift cards would also give them a sales pop.
“Lots of gift cards were sold, but it’s the spending of gift cards that makes the difference,” the Target manager said of the fact that gift card sales are only recorded on retailers’ balance sheet when cards are redeemed.
Marshal Cohen, chief analyst at NPD Group Inc., a market research company, blamed the increasing popularity of gift cards for “taking the impulse out of holiday shopping.”
Analysts were also debating whether the unimpressive season was a reflection of consumers having spent conservatively because they’re tapped out.
“Whether this suggests a (weakening) consumer or changes in buying patterns is difficult to gauge at the first brush,” said Dan Hess, founder and CEO of Merchant Forecast, a research company.
Wayne Best, senior vice president of business and economic analysis for Visa USA, said he believes the slowing housing market had more of a negative impact on holiday spending than analysts originally thought. A big source of spending in recent years has been from home equity refinancing, which allowed shoppers to extract cash from their inflating home values; refinancings have dropped sharply as interest rates have risen.
Port Arthur’s Target stated that, despite expectations, the hottest selling holiday items were gaming systems, digital cameras and the Baby Alive doll.
The Associated Press contributed to this story.