Retailers Struggling to Salvage Holiday Season

U.S. retailers shaved prices yet again Wednesday in an effort to lure shoppers and boost holiday sales figures that are below even the most pessimistic expectations, AP reported Thursday. They are betting on a boost from holiday gift cards, which are not credited as sales until they are redeemed by recipients. According to the National Retail Federation, shoppers will spend $26.3 billion in gift cards this Christmas season, a 42% rise from 2005. Shares of most retailers declined Wednesday, suggesting investors are not optimistic about a post-holiday bounce, discounts and gift cards notwithstanding. The post-Christmas week is estimated by ShopperTrak RCT Corp. to represent 16% of total holiday sales. According to The International Council of Shopping Centers, same-store sales for the holiday period are coming in shy of an already low 2.5% expected rise, although its chief economist, Michael P. Niemira, said holiday sales might yet reach forecasts. Target (TGT) warned Monday that same-store sales could decline this month, and MasterCard Advisors' consumer spending gauge posted a scant 3.6% rise from November 23 to December 24 -- the low end of forecasts, and well below last year's 6.6% gain. "The ingredients were not there for a blockbuster season," said MasterCard Advisors' Michael McNamara. Final same-store sales for December will be reported January 10.

Sources: AP
Additional Reading: No Christmas Cheer For Retail Stocks

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