Tags: Discount | Holiday | Sales | E-commerce

Discounting Crimps Holiday Weekend Sales; E-commerce Jumps

Sunday, 01 December 2013 04:38 PM EST

Heavy discounting took a toll on U.S. retail sales during the Thanksgiving weekend as shoppers spent almost 3 percent less than they did a year earlier, according to data released Sunday by an industry group.

That could be an indication of a more difficult season for many retailers. One bright spot this weekend, according to the data, was e-commerce as online sales soared.

The National Retail Federation estimated the average shopper spent $407.02 over the weekend, or 3.9 percent less than during the same weekend last year, because of lower prices it said would persist through the rest of the season.

"Retailers will continue to aggressively promote their in-store and online offerings, looking to entice today's very budget-conscious and value-focused shopper," said NRF Chief Executive Matthew Shay.

The NRF said 141 million people went shopping at least once during the holiday weekend, up from 139 million last year. But total spending was expected to reach $57.4 billion for the four-day period — which includes Black Friday, the biggest shopping day of the year — down 2.8 percent from $59.1 billion over the same weekend in 2012.

The big deals will also dent profit margins, analysts said.

"Sales will go up, but gross margins are going to be down. Doorbusters were what people were shopping for, more than the regular-priced stuff," said Ron Friedman, retail practice leader at the consulting firm Marcum LLP.

The Thanksgiving weekend is an early gauge of consumer mood and intentions in a season that generates about 30 percent of sales and nearly 40 percent of profit for retailers.

But many have given modest forecasts for the quarter. Wal-Mart Stores Inc said it expects no growth in its U.S. comparable sales, and Macy's Inc didn't raise its full-year sales forecast despite strong numbers last quarter.

The shorter holiday period this year — there are six fewer days between Thanksgiving and Christmas compared with 2012 — prompted retailers to begin offering bargains on Monday, earlier than usual, something Shay said likely pulled some sales forward to the first part of the week.

The NRF stuck to its forecast for retail sales to rise 3.9 percent for the whole season.

Chad Hastings, the general manager of Town East Mall in Mesquite, Texas, near Dallas, said shoppers were even more focused this year on specials, noting a higher correlation between the timing of doorbusters and the rise in shopper traffic at his mall over the weekend.

"Retailers are doing whatever they can to get that wallet share earlier," Hastings said. Town East Mall's anchor tenants include J.C. Penney, Macy's and Sears.

E-COMMERCE MAKES THE DIFFERENCE

ComScore Inc, an analytics firm, said U.S. online sales rose 17.3 percent on Thanksgiving and Black Friday, outpacing sales growth at brick-and-mortar stores. ComScore has forecast a 16 percent jump in online sales for the season, helped by greater use of mobile devices.

The most visited e-commerce sites in order were those of Amazon.com Inc., eBay Inc., Walmart, Best Buy Co. and Target Corp., comScore said.

Retailers are also being aggressive online as they look to benefit from Cyber Monday, which falls on Dec. 2 this year. Cyber Monday is the biggest sales day of the year for e-commerce.

J.C. Penney Co.and Macy's were among retailers that had already begun their "Cyber Monday" sales on Sunday, looking to keep the momentum going. Target was calling the occasion "Cyber Week."

The NRF predicted 131 million Americans would shop online on Cyber Monday, compared with 129 million last year.

RetailNext, an analytics firm, found overall shopper traffic between Wednesday and Friday fell 5.2 percent and that customers went to fewer different stores, doing more online research beforehand.

But shoppers spent more money in the stores they did go to, and Shelley Kohan, vice president, retail consulting at RetailNext, said that a website good enough to make shoppers want to visit a store is more crucial now than ever.

"Shoppers have more options," Kohan said.

© 2024 Thomson/Reuters. All rights reserved.


Economy
Heavy discounting took a toll on U.S. retail sales during the Thanksgiving weekend as shoppers spent less than they did a year earlier, according to data released Sunday by an industry group.
Discount,Holiday,Sales,E-commerce
653
2013-38-01
Sunday, 01 December 2013 04:38 PM
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