Super Saturday lived up to its reputation but didn’t move the needle.
The crowds came out. Business was good, and according to Customer Growth Partners, retail sales rose 4 percent to $55 billion last weekend, compared to $53 billion on the two comparable days last year.
Yet the surge wasn’t super enough for anyone to revise the outlook which stands at a modest 3 percent sales gain on the season. Moreover, profits could be down from last year amid ubiquitous discounting.
Retailers are expecting traffic to continue to build this week and next, as they further escalate markdowns, attempt to clear excess inventories and put fresh spring and resort merchandise on their selling floors intended to sell at fullprice.
“It’s been a funny Christmas,” said Brian Bolke, president of Forty Five Ten in Dallas, who characterized business as alternating weekly between sluggish and healthy, with last week being strong. “We’re in a very promotional environment, and we did have a lot of activity over the weekend on fall-winter markdowns because finally people are biting.”
“Saturday was our best day of the season,” Bolke said. “It’s not a super high-ticket Christmas, but we’ve been pleasantly surprised by the traffic. I think it will end up being kind of down-to-the-wire.” Bestsellers were designer jewelry priced from $1,000 to $3,000 by James Banks; small home goods and books; Vianel monogrammed leather goods; and estate jewelry from Faerber Collection by top houses including Bulgari, Cartier and Van Cleef & Arpels.
“Some retailers tell me they are doing OK; others are disappointed. I’m not hearing anyone say, ‘Wow. This is a great year,'” said Robert D’Loren, the founder and chief executive of Xcel Brands, which owns Isaac Mizrahi, C. Wonder, Halston and Judith Ripka. Price transparency facilitated by the Internet is “accelerating the markdown cycle,” D’Loren said.
Sources said that on Super Saturday the Walt Whitman and Roosevelt Field Malls, both on Long Island, were jammed. In Manhattan, Bloomingdale’s, Macy’s and Saks Fifth Avenue also saw strong traffic but were not nearly as mobbed as past years.
Robert Drbul, retail analyst at Nomura Securities Inc., said, “This weekend, we visited stores in Connecticut, New York and Florida. Our checks indicated both heavier traffic and deeper promotions than observed on Black Friday, largely as expected, and we believe Macy’s, J.C. Penney and Target exhibited the heaviest traffic.”
Drbul said that given traffic trends to date, “We would surmise that Super Saturday amounted to the biggest in-store shopping day of the year thus far. We expect traffic to remain heavy in the next few days leading up to Christmas Day, and for the largest day remaining to be next Saturday, Dec. 26.” Gift-card redemptions and gift returns, as well as post-Christmas deals, should fuel the traffic.
Drbul noted that promotions in general were broad and deep as retailers continue to deal with elevated inventory levels. Heavy promotional activity was noted across Macy’s, J.C.Penney and “most surprisingly at Nordstrom,” he said.
Compared to an average day during the year, on Super Saturday, mobile traffic was 6 percent higher and wireline broadband traffic rose 19 percent on the Verizon network, according to Michele Dupré, vice president of retail, hospitality and distribution, Verizon Enterprise Solutions. “When you look at the increase in mobile activity, also with the increase we have seen tied to the wireline, I think retailers are on track to have a good season,” Dupré said. “We definitely see the activity to continue to grow between now and Christmas and based on last year we expect that traffic to soar even Christmas Day and post-Christmas.” She expects many consumers will “go the extra mile” to get deliveries before Christmas by paying for express deliveries and picking up packages in stores.
To spur traffic this week, Macy’s has been offering $10 “cash cards” at more than 600 stores to the first 250 customers on a first-come, first-served basis. The offer started Sunday and runs through Tuesday. “We have a lot of great deals on last-minute gifts, and now shoppers who come early will get even more value with a free cash card, on us,” said Martine Reardon, Macy’s chief marketing officer, in a statement. “Last weekend was good and pretty much consistent with how it’s been. Not much has changed,” said Steve Siegler, chief executive officer of J. McLaughlin. “It doesn’t feel that Christmas-y yet, but with the cold snap we just had, it’s putting people a little bit more in the spirit.”
Saturday and Sunday represent “the two highest traffic days of the year,” said Craig Johnson, president of Customer Growth Partners. “It was a strong weekend, but it was too-little, too-late to save retailers from a lackluster season. The first half of December was sluggish. The good news is that ‘second season’ week — Christmas to New Year’s Eve — starting on a Saturday this year, will be the best ever with all the discounts and fresh product coming in. Holiday-to-date was up only 2.9 percent but with benign weather in most of the country, we think there will be a strong finish to Christmas and the rest of December, to bring the total close to our 3.2 percent forecast.”
Whether you are a retailer or a consumer, it just hasn’t really felt like a normal Christmas season. Yet both have something to look forward to. Retailers will see a surge in shopping this week — in stores and online — as there is only a day or two left to get online orders delivered in time for Christmas Eve. L.L. Bean said Monday that if you order by noon Tuesday, Dec. 22, you will get your gifts delivered free by Christmas Eve. But Angela Roi said that you needed to order by 1 p.m. Monday to receive by Christmas. Vince said that every ground order placed from Dec. 18 to Dec. 21 at 12 noon, Eastern time, will automatically be upgraded to two-day express at no cost.
Shoppers can expect even meatier markdowns as merchants look to clear holiday and winter merchandise to make room for resort and spring goods they hope to sell at full price. Discounts, already widely seen at 40 or 50 percent — Gap, Old Navy and Abercrombie & Fitch staged storewide sales at 50 percent off — will jump to 60 to 70 percent, and will take another leap in the week after Christmas.
Business has been tough for several reasons: record high temperatures hampering sales of cold weather outerwear and accessories; the increase in the consumer savings rate and little or no wage gains for most of the population; soft Wall Street bonuses; and the population shifting their spending away from fashion to more on dining out, theater tickets, spas and other experiences.
In addition, tourist spending is down due to the strong dollar and the troubled Russian, China and Brazilian economies. That’s hurting the luxury sector in particular and such stores as Neiman Marcus, Saks Fifth Avenue and Bloomingdale’s.
Johnson visited the King of Prussia Mall near Philadelphia last weekend. He described the new Primark store, which specializes in fast fashion and has two stores operating in the U.S., as packed, and likely to have a strong holiday season. Aside from Primark, he cited TJMaxx, J. McLaughlin and Lululemon as doing well this season. He said Best Buy is experiencing good volume based on units but not revenue due to price compression. Wal-Mart and Target are experiencing an “OK, not a bang -ut Christmas” though Target is excelling in toys, particularly “Star Wars,” Lego and Nerf products. “Macy’s appeared to do a solid business. This is their prime time. They’re making up for some lost ground.”
“If you were out shopping last weekend, you likely felt the need to buy coats, hats, sweaters, and hot food. But as we go through the next several days, we will go back to some crazy warmth,” said Evan Gold, executive vice president of global services for Planalytics, which helps retailers plan their business based on weather patterns. “Christmas Eve will be about 70 degrees in most of the east, and it will be in the 80s in the South. It will be record-breaking warmth on the run-up till Christmas. The opportunity for seasonal business remains in the West, the Rockies, the Northwest. Super Saturday was great. It was cold and dry in the East. But if we look at this week, L.A. midweek will be in the low to mid-60s and New York will be warmer than Los Angeles. If you need a coat, there are going to be some great buys out there.”