Cash-strapped shoppers are searching for bargains in the final days before Christmas and some are limiting their gift-giving to children in what could be a make- or-break weekend for US retailers.
Consumers who waited until now for deeper discounts probably will be rewarded as retailers seek to clear inventory and salvage what may be the worst holiday season in 40 years, even though their fourth-quarter profits may suffer as a result.
Macy's Inc, the second-largest US department-store chain, offered $800 sapphire or ruby and diamond rings for $249 on saturday. Gap Inc's Banana Republic chain advertised clothing for as much as 60 per cent off. A $2,100 Marc Jacobs dress was listed at $629.95 on Saks Inc's Web site. Toys R Us Inc cut prices on Elmo dolls.
“We're buying less stuff for each other and just overall,” Dennis Decker, a 47-year-old landscape architect, said on Saturday outside a Kohl's in Douglasville, Georgia. “Usually I buy stuff for my sisters. This year I'm just going to make them some Christmas ornaments.”
The Standard & Poor's 500 Retailing Index has shed 31 per cent this year, with only two of its 27 companies gaining. The index doesn't include Wal-Mart Stores Inc, the world's largest retailer, which rose 33 cents to $55.74 December 19 in New York Stock Exchange composite trading. The stock has gained 17 per cent this year.
Toys R Us is cutting the price of Mattel Inc's Elmo Live furry red Muppet through December 24 by $10 to $49.99 and reducing Jakks Pacific Inc's EyeClops Night Vision Infrared Stealth Goggles by $20 to $59.99.
“I do believe this is going to be one of the largest weekends in retail history, ToysRUs Chief Executive Officer Gerald Storch said in an interview December 19. There's a lot of pent-up demand, and there's going to be fantastic deals.
Shoppers grappling with shrinking housing prices and rising unemployment have cut back on non-necessities, pushing the US economy into a recession. Consumer spending accounts for more than two-thirds of gross domestic product, and 81 per cent of consumers plan to spend less this holiday season, according to a study by NPD Group Inc released on December 19.
