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Retailers take returns as shoppers snap up sales

POSTED: January 7, 2008 5:02 a.m.
An hour before sunrise, there is a cadre of determined shoppers on the prowl. Most are women, many are sans makeup with their hair covered by a baseball cap. They are clad in sneakers to give them additional agility as they search for the coveted prize — a bargain worth bragging about.

The scene is repeated at store after store in Gainesville, such as Kohl’s, Belk and J.C. Penney, which all opened their doors at 6 a.m. As other stores opened, so came the shoppers.

The lure is deep discounts of 50 percent or more. It is the deeper discounts of 75 percent that drew the largest crowds, most in search of Christmas decorations that will be packed up and not used for a year.

While the shopping began early, it continued throughout the day.

Kathy Bryant of Oakwood decided to forego lunch for a chance to bargain-hunt at Belk at Lakeshore Mall.

"I’m looking for a bargain," she said, holding three Christmas tree ornaments in her hand.

Kay Reece of Gillsville had already loaded up on several ornaments at Belk for a blue-themed tree she is planning for next year.

But Reece, like many shoppers, is playing a cat-and-mouse game with the retailer.

"They’ve got several things I like at 75 percent off, but they’ve got a good quantity of them," she said. "In four or five days, they’ll mark them down again."

Gainesville stores were also loaded with shoppers armed with gift cards, while others were returning gift items.

At some retailers, returning is not as simple as handing over the merchandise. Some stores are now requiring gift receipts or mark the merchandise with adhesive proof of purchase decals.

Retailers opened earlier than ever on the day after Christmas on Wednesday and slashed prices with hopes of salvaging a holiday season that is falling short of already modest expectations.

Merchants are trying to lure post-Christmas bargain hunters and gift-card splurgers that could provide a much needed boost during this crucial period. Gift card sales, which have been increasingly popular in recent years, are not recorded until shoppers redeem them.

The International Council of Shopping Centers said Wednesday that same-store sales, or sales at stores opened at least a year during the November-December period, appear to be coming in just below slim projections for a 2.5 percent gain, though it said that a post-Christmas buying could help restore the shortfall. That contrasts to a more upbeat assessment from its chief economist Michael P. Niemira, following the weekend’s spending surge, who predicted that holiday sales could at least meet forecasts.

Target Corp. warned late Monday that its same-store sales might decline for December, while a broad gauge of consumer spending released by MasterCard Advisors, a division of the credit card company, which includes estimates for spending by check and cash, reported on Tuesday an increase of 3.6 percent from Thanksgiving to Christmas. That compared with a 6.6 percent gain in the year-ago period. The 2007 holiday figure is at the low end of its 3.5 percent to 4.5 percent range. Excluding gasoline and auto sales, that figure was 2.4 percent.

"The ingredients were not there for a blockbuster season," said Michael McNamara, vice president, research and analysis of MasterCard Advisors. "And retailers in many respects got the most out of the season that they could based on the environment."

Higher gasoline prices, an escalating credit crisis and a housing slump made shoppers cautious about buying holiday gifts. Still, as McNamara and other experts said the season is not the disaster that some feared. Turnout is turning out to be reasonably in line with the weakening sales growth seen throughout the year, McNamara said.

Still, stores had to step up discounting to spur sales, raising concern over stores’ profit picture during this crucial period. The holiday season accounts for up to 30 percent of annual stores sales. For toy sellers, holiday business accounts for as much as 50 percent.

The post-Christmas season has become more important with the increasing popularity of gift cards. According to the National Retail Federation, consumers were expected to spend a total of $26.3 billion in gift cards this holiday season, up 42 percent from $18.5 billion in 2005.

ShopperTrak RCT Corp. said that the week after Christmas accounts for about 16 percent of total holiday sales.

"This is going to be a more important chunk of business than most people realize," said Scott Krugman, a spokesman at NRF.

Marshal Cohen, chief industry analyst at NPD Group Inc., a market research firm, agreed, noting that when the industry looks at the holiday results, they need to include January business.

"When we take a look at the results of this holiday retail season, it will be important to remember that the rules have changed and so should the way we read the success of the holiday," Cohen said.

The Associated Press contributed
to this report.



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