Retailers see modest holiday gains
Last-minute holiday shoppers brought relief to retailers, handing them modest sales gains for the season and prompting several to raise their fourth-quarter profit outlooks.
The improved picture comes because retailers never had to resort to drastic price-cutting after keeping inventories lean. Still, retailers may be facing chilly months as consumer spending is expected to remain muted amid high unemployment and tight credit.
"The holiday season was decent but nothing you can get excited about. And it was saved by a last-minute surge," said Ken Perkins, president of research firm RetailMetrics. "Santa didn’t deliver coal, but he certainly didn’t deliver caviar."
According to Thomson Reuters’ preliminary findings, eight retailers beat expectations, one met, and four missed. Sales figures are based on sales at stores open at least a year and are considered a key indicator of a retailer’s health.
Retailers’ decent performance in December, helped by a last-minute spending spree in the days before Christmas, comes after a disappointing November fast payday loans.
Retailers managed to avoid another Christmas catastrophe because they had a year to plan for a new consumer mindset. They headed into the season with sharply lower inventories and more practical merchandise that resonated with shoppers who stuck to shopping lists and researched deals online before they bought. Shoppers were in malls buying, but they were choosy. They picked up discounted flat-panel TVs, computers and smart phones, but often stayed away from clothing unless it was practical.
Stores were on edge until near Christmas because consumers delayed buying more than last year, either because they were shut in by winter snowstorms or were holding out for better deals. But many stores kept to planned discounts. That’s different from last year, when stores started liquidating merchandise in November because of the escalating financial crisis.