By Ylan Q. Mui
Washington Post Staff Writer
Thursday, December 27, 2007
The gifts have been unwrapped and thank you notes are forthcoming. Stockings have been removed from fireplace mantels and tucked back into the attic. Santa has come and gone and left for a vacation in Bermuda.
But we are still at the mall.
After hunting for last-minute Christmas presents over the weekend, consumers returned to their favorite retailers yesterday, re-energized and ready to spend. According to the International Council of Shopping Centers, nearly one in five consumers planned to shop yesterday. Gift cards were among the primary drivers. Others were drawn by discounts. Some came to return and exchange.
Clearly, the holiday season doesn't end on Christmas.
"We're all measuring something on a year-to-year basis that this year almost isn't fair," said Marshal Cohen, senior analyst with consumer behavior research firm NPD Group. "To really assess how the holiday has fared, we're going to have to wait until January numbers start coming in."
Typically, retailers count November and December when calculating holiday results. Those two months traditionally account for about 20 percent of total retail sales. But over the years, their proportion has eroded.
In 1994, November and December made up 20.69 percent of annual retail sales, according to the National Retail Federation, an industry advocacy group. Last year, they amounted to 19.59 percent -- not a huge decline, but one that seems likely to continue as gift cards become increasingly popular.
A survey by the group ranked gift cards the most-coveted present of the season, and sales are expected to reach $26.3 billion this holiday. Retailers love them because they provide incentive for consumers to spend more than they would if they were paying with their own money -- or even with someone else's cash, according to a consumer psychology study by Rebecca White at the University of Waterloo in Ontario, Canada.
Stores cannot count the sale of a gift card as revenue until it is redeemed, often in the week after Christmas or into January. With sales this holiday season on shaky ground, many retailers are hoping shoppers use them sooner rather than later.
"Gift cards have transformed the holiday shopping landscape, and they have extended holiday shopping well past Christmas day," said Michael P. Niemira, chief economist and research director of the ICSC. "December 26th begins that new phase of the holiday shopping season."
Madison Horner, 13, of Ashburn arrived at Tysons Corner Center with her family at about 10:30 a.m. with a long day of shopping ahead yesterday. Three gift cards from Hollister -- for $75, $40 and $30 -- were among her prized presents, and she planned to waste no time putting them to use.
"I know what I'm looking for at any store," Madison said.
Retailers also attempted to lure shoppers with post-holiday discounts. Cheap, chic H&M plastered its windows at Tysons Corner with signs boasting 70 percent discounts, while teen apparel store Garage posted a sign outside its door that read, "Still wishing? Treat yourself now to hot deals."
Wal-Mart sent customers an e-mail promoting an after-Christmas clearance on items including the Polaroid 8-megapixel digital camera and photo frame and the Sparkle and Twirl Mermaid Dora. Company spokeswoman Christi Davis Gallagher said stores were expecting a rash of customers redeeming gift cards this week, particularly in entertainment, toys and apparel.
At Target, deals on holiday-related merchandise and storage boxes to help shoppers get organized are expected to be popular, spokeswoman Lena Michaud said. Its weekly circular promotes electronics, games and movies -- perhaps to play on the new gaming consoles and flat-panel TVs that have been hot gifts in recent years.
"At one time retailers hated this week because the returns were almost equal to their sales," said C. Britt Beemer, chairman of America's Research Group, a consumer research firm. "Retailers who tried to save some margin dollars before Christmas are now pulling out all the stops to sell that merchandise now."
The days after Christmas could become particularly important this year as retailers struggle to heat up lukewarm holiday sales. According to an analysis by MasterCard SpendingPulse, U.S. retail sales, including gasoline, between the day after Thanksgiving and Christmas Eve grew a modest 3.6 percent over the comparable period last year.
"Anyone who was looking for this holiday season to kick-start a new wave of growth would find these numbers falling short of expectation," said Michael McNamara, vice president of research and analysis for MasterCard Advisors.
The report showed clothing sales lagging other categories, with specialty apparel up only 1.4 percent from the previous year. Women's clothing suffered most, with a 2.4 percent decrease in sales from last year, while men's apparel finished up 2.3 percent. Meanwhile, luxury goods excluding jewelry saw strong, steady growth of about 7.1 percent over last year.
Electronics were among the must-have items on Black Friday -- particularly the hard-to-find Nintendo Wii -- and sales of electronic products surged 15 percent that day, according to the MasterCard report. The fire fizzled as the season wore on, and the category grew a total of 2.7 percent from last year.
Shoppers rallied in the days before Christmas, however, with two key studies showing solid results. The ICSC reported sales at stores open at least a year rose a solid 2.8 percent for the week ending Dec. 22 compared to last year. Another retail research firm, ShopperTrak, reported a jump in total retail sales of 18.7 percent from Friday to Sunday.
Retailers are hoping to keep that momentum going well through the new year. Shoppers such as M.C. Beraud, 18, of Vienna didn't disappoint them yesterday.
Beraud took a break in the food court with her sister, Catherine, 12, after three hours of power shopping. Beraud's Gap bag with a new red cable knit sweater was on the floor, while Catherine's Old Navy purchases sat on the table. The rest of the stash was in the car: dresses from Bloomingdale's, shoes from Macy's, a Fendi purse for her mother's birthday. And they weren't done, yet.
"We've already done the top" of the mall, Beraud said. "We have to do the bottom level now."
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