December 23, 2008 / 3:07 PM / 11 years ago

UPDATE 2-U.S. shoppers unexcited by last-ditch deals

(Recasts; adds data from ICSC, ShopperTrak and comScore)

By Jessica Wohl

CHICAGO, Dec 23 (Reuters) - The U.S. holiday shopping season is shaping up to be the worst in up to 40 years as steep discounts failed to rouse consumers even in the final weekend before Christmas, new data showed on Tuesday.

Several retail groups and research firms reported weak sales and store traffic during the “Super Saturday” weekend compared with the same period a year ago. A year-long recession, coupled with winter storms hitting large sections of the United States, kept many shoppers at home.

The International Council of Shopping Centers and Goldman Sachs said sales in the week ended Saturday, Dec. 20, fell 0.6 percent from a year earlier. The ICSC now expects holiday sales, which include all of November and December, to fall 1.5 percent to 2 percent.

That is down from its prior forecast for sales to fall as much as 1 percent, which already represented the worst performance since the ICSC began tracking such data in 1969.

Over the past 40 years, there has not been an annual decline in holiday sales.

ShopperTrak said store traffic on “Super Saturday” sank 17 percent from a year ago. Sales that day alone rose 0.5 percent from a year ago, but were down 6.5 percent for the week.

The results bolstered survey findings from America’s Research Group and UBS. Just 38.7 percent of Americans said they went shopping during the final weekend before Christmas, the lowest turnout in at least six years and down from 41.6 percent in 2007.

Traffic was especially weak in the U.S. Northeast and Midwest, which were hit by winter storms from Friday through Sunday. People who did shop, flocked to stores offering deep discounts, led by Wal-Mart Stores Inc (WMT.N).

“Even in areas where the weather wasn’t bad, though, the shopper levels were not good. In areas where there was bad weather, obviously it was even more of a downer,” said Britt Beemer, America’s Research Group founder and chief executive.

Wal-Mart was the big winner of the weekend, with 69 percent of shoppers saying they visited its stores, up from just 33 percent during the same weekend last year.

The Standard & Poor’s Retail Index .RLX closed Tuesday down 1.4 percent. Wal-Mart shares fell 1.3 percent.


The last Saturday before Christmas usually ranks just behind “Black Friday” — the day after the U.S. Thanksgiving holiday — as the single largest holiday sales day.

But this year, some shoppers decided to skip the malls and shop from home. According to comScore (SCOR.O), last weekend’s online spending of $677 million was nearly twice as high as spending during the weekend before Christmas in 2007.

Still, holiday season online shopping through Dec. 21 was down 1 percent to $24.71 billion. [ID:nPnAQTU029]

The U.S. economy has been suffering from a recession since December 2007, and tighter credit and more job losses are pressuring consumers’ already tight budgets.

The National Retail Federation on Tuesday asked President-elect Barack Obama to consider setting up national sales tax holidays to drive spending in 2009. [ID:nN23534568]

Shoppers are also buying fewer gift cards this year, worried that retailers might go out of business before the cards can be used.

Just 51.5 percent of people surveyed said they have bought gift cards so far this year, down from 57.6 percent at the same time last year. By this time in 2006, 66.8 percent had bought gift cards, America’s Research Group said.

Beemer and other retail experts expect more retail bankruptcies in 2009 than usual as chains that came up short this holiday season fight to survive. Circuit City Stores Inc CCTYQ.PK and KB Toys are among the companies that have already filed for Chapter 11 bankruptcy protection.

Wal-Mart was the only retailer Beemer called a “star performer” because it retained 91.2 percent of last year’s holiday shoppers this season, according to the survey.

Retailers that kept less than 69 percent of last holiday season’s shoppers included American Eagle Outfitters Inc (AEO.N), Lowe’s Cos Inc (LOW.N), Macy’s Inc (M.N), Wal-Mart’s Sam’s Club, Walgreen Co WAG.N, Dillard’s Inc (DDS.N) and Sports Authority Inc [LEOGRS.UL].

The America’s Research Group/UBS Christmas Survey for 2008 included 1,000 telephone interviews conducted on Saturday and Sunday and has a margin of error of plus or minus 3.8 percent. (Editing by Jeffrey Benkoe, Dave Zimmerman, Tim Dobbyn)

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