Retailers Try to Extend Shopping Past Holidays

Discounts, Promotions Aimed at Gift Card Recipients

The holidays may be over, but the shopping hasn't stopped.

The weeks after Christmas have traditionally been the province of unwanted-gift returns. But now retailers are increasingly rolling out discounts and racks of new merchandise to attract shoppers flush with gift cards.

"January's not just the month after Christmas," said Suzanne Tager, manager of the North American retail practice for consulting firm Bain & Co. "January's the month that really counts for retailers."

This season, January could play a particularly important role because of what some industry experts have deemed a "soft" Christmas. Official results for the holiday season will not be available until next month after the Commerce Department releases its December sales data. That has not stopped analysts from offering up their own mixed bag of predictions for how the season went, ranging from lackluster to merry and bright.

MasterCard SpendingPulse, which bases estimates on its credit card transactions, characterized the shopping days from Thanksgiving to Christmas as "soft." It predicted sales growth would be 3 percent, compared with 5.2 percent last year, seasonally adjusted. Visa USA has lowered its holiday forecast to 6.5 percent growth from 7.5 percent, saying last weekend failed to live up to expectations. The forecast covers all of November and December and includes grocery, restaurant and gasoline sales.

Wayne Best, senior vice president for business and economic analysis at Visa, said falling home prices are taking their toll on shoppers' psyches. "Consumers have used their home as an ATM machine over the past three years," he said. "What we're seeing is a much more constrained consumer."

But the National Retail Federation, a trade group, predicted that retail sales will grow 5 percent from last year, to $457.4 billion, a smaller gain than 6.1 percent in the 2005 holiday season but still beating the industry's 10-year average. Research firm ShopperTrak, which measures traffic and sales at shopping centers, has taken a similarly optimistic view. Early results from Friday and Saturday, two of the busiest days this holiday season, showed sales up 22.5 percent to $16.28 billion.

"The total dollars spent indicate a very strong close to the holiday shopping season as procrastinating shoppers proved they were willing to spend," said Bill Martin, cofounder of ShopperTrak.

Many retailers are not yet counting the season over. Retail spending in January is driven largely by the increasingly popular gift card. Over the past two months, sales of gift cards were expected to reach an estimated $24.81 billion, with the average shopper spending $116.51 on them, more than a 30 percent increase compared with last year, according to the NRF.

Any windfall is belated because stores are not allowed to count the cards as sales until they are redeemed.

"The week after Christmas has really helped tell the tale of what to expect" for the holiday season, said Scott Krugman, an NRF spokesman.

Bain estimates that 40 percent of all gift cards would be redeemed by the end of January. Several chains launched post-Christmas sales yesterday to encourage shoppers to use the cards sooner rather than later. Barnes & Noble offered 50 percent off its holiday merchandise, and Banana Republic began its "winter sale" with half-off selected apparel. Meanwhile, Gap stores were promoting new styles, such as striped swimsuits and a cropped hoodie. Apple Computer sent an e-mail to customers showcasing its latest iPods and laptop computers with this message: "You shopped for everyone else. Now it's your turn."

That is what Carol Adams of Springfield and her daughter, Veronica, 16, did yesterday at Fair Oaks. Usually, they avoid the mall on the day after Christmas because of the crowds. This year, they made an exception.

"The gift cards were just kind of burning a hole in my pocket," Adams said.

She used a gift card to Sephora to fill a shopping bag with "perfume and makeup and girly-girl stuff" and also stopped at Teavana to spend yet another gift card. Veronica paid for four shirts at Hollister with her own money, saving her mall gift cards for another day.

Fair Oaks General Manager Chris Poleto said traffic was strong throughout the weekend, with children lined up to take photos with Santa until the mall closed at 6 p.m. on Christmas Eve. Usually, he said, he lets Santa go home early because the shopping center is deserted.

Poleto said he had seen many people buy presents for others and a little something for themselves during the holidays. By the day after Christmas, however, the giving is over.

"Today it's all for me," he said.