Post-Holiday Sales Surge, but Season’s Profits May Be Mixed
The day after Christmas was one of the biggest shopping days of 2011, wrapping up the year with a big bang, mall managers and market analysts said.
Mall parking lots were full, and cash registers were ringing all over California and the United States. As a result, market-research company ShopperTrak said that Dec. 26 was the fourth-busiest shopping day of the holiday season. (Black Friday, the day after Thanksgiving, came in first.) Retail foot traffic shot up 25.9 percent compared with
Dec. 26, 2010. And consumers spent $7.1 billion, or 25.5 percent more than in 2010. ShopperTrak founder Bill Martin said the late sales surge would help December’s sales outpace 2010.
The International Council of Shopping Centers also found that retail sales were healthy the week before Christmas. Sales inched up 4.5 percent for the week ending Dec. 24 compared with the previous year. However, some Wall Street analysts and retailers feared the sluggish economic recovery and big promotions by major retailers would cut into gains made in the last weeks of December, ultimately delivering a modest profit for the holiday season.
During the past few years, holiday shopping has been marked by late surges in buying. Foot traffic, which crested Dec. 17, broke a shopping lull that set in after the traditional Black Friday start of the season, said Gila Leibovitch, who co-owns several boutiques in Southern California.
“It wasn’t busy all throughout December. I wondered where were all of the people,” Leibovitch said. “But during the 20th to the 24th, it was crazy. On the 24th, the mall closed at 6 p.m. We stayed open until 9:30 p.m.” Leibovitch co-owns shops Premier Men and Premier Kids at the Beverly Center in Los Angeles. Her other stores are Melrose Place, The Vault Men’s and The Vault Women in Laguna Beach, Calif.
With business booming during the last weeks of December, mall managers at The Grove in Los Angeles and The Americana at Brand in Glendale, Calif., said their parking lots had
30 percent more traffic during the week of Dec. 19 compared with last year. On Dec. 26, the Beverly Center’s car traffic was estimated to have increased by single digits, said Susan Vance, the mall’s marketing director.
While there’s no argument about a post-holiday traffic jam, there are concerns about whether it will turn out to be a profitable holiday.
Wall Street analyst Adrienne Tennant of Janney Capital Markets said that shopping crowds were mostly chasing deals. “Nearly all of the retailers we follow returned to their Black Friday–level promotions, with some reaching their deepest discounts of the season,” she wrote in a Dec. 28 research note. Abercrombie & Fitch and Ann Taylor offered
50 percent promotions on Dec. 26, Tennant said.
Many consumers expect all retailers to offer generous discounts, said Diane Merrick, who reported robust business at her self-named Diane Merrick boutique in Los Angeles.
A shopper asked Merrick if she offered a 50 percent discount. “I said, ‘No.’ She said, ‘Everyone is half off. You must be 50 percent off, too.’ I’m a little store. I can’t compete with stores taking 50 percent off,” Merrick said.
Liz Pierce, an analyst for Roth Capital Partners, feared the season’s big promotions would cut away at retailers’ margins. She also noted the unseasonably warm weather in December throughout much of the United States hurt retailers.
“The weather this December was not so drastically cold,” Pierce said. Therefore, consumers did not feel a need to purchase sweaters and outerwear. Also, there was not a clear fashion statement or must-have item this year, which often drive sales.
Anxiety over the economy’s sluggish recovery loomed large, said Don Zuidema, co-owner of leading West Hollywood, Calif., boutique LASC. “People are more willing to spend,” he said. “They are shopping a little more. But we’re not going to see huge increases and gains. We’re going to see modest increases and gains, which isn’t bad.”
Holiday sales were robust for e-commerce stores. E-commerce sales increased 15 percent from Black Friday to Dec. 26 compared with the same time last year, said comScore, an e-commerce market-research company. The week ending Dec. 25 was marked by a 16 percent boost in spending over the previous year.
E-commerce fashion emporium Revolve Clothing estimated that 2011 was the best Christmas in its more than eight years of doing business but declined to give numbers. “Christmas was not a busy time for us in the past. People were more accustomed to in-store shopping,” said Cassidy Burton, the men’s fashion director and buyer for the site. “But as business grew, it got busier and busier. Last year was good, but this Christmas was stronger.”
