While it’s still too soon after Christmas to declare this holiday shopping season a flop, it’s not looking good for many of the nation’s major retailers. With the caveat that some 16% of holiday retail sales occur the week after Christmas, which may still boost the fortunes of some laggards, it’s pretty evident who the winners and losers are this year.
An informal survey of the origin of the gifts under my family’s Christmas tree supports what retail analysts have been predicting: department stores and women’s apparel shops trailed other retail formats, such as consumer electronics chains and online retailers. Not a single present under our tree was purchased from a department store. That’s bad news for struggling chains like Macy’s, Dillard’s, and JC Penney. Macy’s CEO Terry Lundgren, who pulled out all the stops this season keeping the doors of some Macy’s East stores open around the clock, may find that investors are growing impatient waiting for him to reinvent the American department store. With the exception of a single $40 cashmere sweater purchased on sale at Old Navy, there was no women’s apparel at all under our tree. Indeed, women’s clothing was a particular sore spot this season dropping nearly 2.5%.
One big bad surprise this season is the weak performance of the nation’s #2 discount chain Target, which has revised its December estimate for same store sales to be -1% to 1% (down from a previously expected range of 3% to 5%). Lulled by Target’s historically steady, strong performance and apparent immunity from the effects of high gas prices, which have vexed archrival Wal-Mart, Target was expected to have a good, but not great, holiday selling season. But it certainly hasn’t turned out that way. Speaking from personal experience I found shopping – particularly toy shopping – at Target frustrating this year. After coming up empty following trips to two Target stores in search of Polly Pocket’s Race to the Mall for my nine year old, I found the elusive item at the first Toys “R” Us store I visited. In turn around mode after years of pummeling from discount chains, including Wal-Mart and Target, Toys “R” Us appears to finally have gotten its retail act together with well-stocked, easy-to-navigate stores and brisk check out lines. We’ll have to wait until January for the numbers, but for now kudos to CEO Jerry Storch (formerly of Target) for visible improvements at the nation’s largest toy retailer.
Other goodies under our tree included an iPod and Bose docking station, both from Best Buy, which impressed me with its efficient – but not overpowering – customer service. (NOT the case at rival Circuit City!) Judging from the bustle at Best Buy, where we also purchased one of this year’s “must have” digital picture frames, I’ll bet the chain had a very merry Christmas.
Too bad the joy wasn’t shared by all.
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