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Retailers Hoping for Holiday Profits

December 22, 2003

NEW YORK (AP) _ Shoppers jammed the nation’s malls on the last weekend before Christmas, snapping up bargains and hunting for popular toys, but retailers were anxious after a much-hoped-for sales bonanza did not materialize for many of them.

Spirits were deflated a bit Sunday after the government warned of a possible terrorist attack during the holiday season.

In response to the heightened national alert level, major mall operators such as Taubman Centers Inc., which owns and manages 31 shopping centers in 13 states, immediately stepped up their security, though company officials declined to elaborate.

``The threat won’t have an effect this weekend, because most people don’t know about the alert,″ said C. Britt Beemer, chairman of America’s Research Group, based in Charleston, S.C. ``But it could reduce retailers’ ability to have a huge business on Monday and Tuesday, and the week after Christmas. It may likely make people who are close to being done decide they’ve purchased enough.″

Some retailing executives disagreed.

``Consumers learned to be vigilant, and I don’t think this will have an effect,″ Taubman spokeswoman Karen MacDonald said. She reported sales at a sampling of Taubman mall stores were up mid-single digits on Saturday from a year ago.

Merchants are counting on heavy shopping this week to meet their goals.

This past weekend, business was heavy at discounters and luxury stores. But sales remained uneven at mid-priced department stores and mall-based apparel chains, which deepened price cuts on sweaters, jewelry and other items, Beemer said.

``I think it was a very strong weekend, but I don’t think it was as big as retailers needed,″ said Beemer, who conducted interviews with retail clients. He added that consumers ``were looking at the lowest price in each category of merchandise.″

Connie Ferree, hunting for bargains with her mother Saturday at the Valley West Mall in West Des Moines, said she’s spending far less this December.

``The job situation is bad,″ said Ferree, who has been struggling to find work.

Despite a recovering economy, merchants struggled with modest sales throughout the season and were counting even more for a sales surge this past weekend after two weekends of Northeast snowstorms. Still, retailers held out hope that the last-minute spending will help merchants meet their sales goals.

``Traffic was about the same as last year, and stores were very busy,″ said National Retail Federation spokeswoman Ellen Tolley. ``And if some stores were a little short of their goal, there’s plenty of time for that to change.″

The federation is sticking to its holiday forecast for a 5.7 percent gain in total sales from a year ago.

In the past few years, the Saturday before Christmas has been the busiest day of the season. Last year, the Monday before Christmas was the second-biggest sales day.

Last year, the week before Christmas accounted for 41 percent of holiday sales, according to the International Council of Shopping Centers.

This year, consumers appear to be waiting longer. According to the association’s survey, conducted from Dec. 4-10, 10 percent of the approximately 6,800 consumers polled had completed their shopping, compared with 15 percent during the same time a year ago.

Many stores, particularly department and apparel stores, had refrained from aggressive discounting earlier in the season, hoping consumers would be willing to pay full price, but the strategy appears to have backfired.

Many stores added ``unplanned broad-based discounts″ this weekend, according to Tom Filandro, senior retail analyst at Susquehanna Financial Group. Limited Inc.’s Express, for example, offered 40 percent off on all sweaters.

That’s good news for consumers such as Margo Whisman, who started her shopping Friday.

``We’re just procrastinators, and that’s why we get the sales,″ said Whisman, who was at the Mall St. Matthews in Louisville, Ky., on Saturday.


Editors: Associated Press writers Patrick Walters in Philadelphia, Ellen Stapleton in Louisville, Ky., and Amy Lorentzen in Des Moines, Iowa, contributed to this report.