In the newest sign that this season is not the best one for retailers, shoppers in the US have done less spending on the final weekend before Christmas despite the steeper discounts offered, Reuters reported. Signs are also evident that shoppers will do more of their shopping after December 25 compared to the same period last year in a bid to get even better deals.
The report cited data from analytics company RetailNext which said that the retail sales in the US dropped by a "mid-single-digit percentage" on Friday and Saturday, December 20 and 21. RetailNext said the number of visits to brick-and-mortar stores declined 7% on the weekend before Christmas compared to the same days in 2012. Online stores, however, have continued to exhibit robust sales, the report said.
The report cited Topeka Capital Markets Analyst Dorothy Lakner who wrote in a note, "We expect the next two weeks to pick up a lot of the slack."
In what is turning out to be the most competitive season, retailers have also been forced to take their promotions to the next level, according to analysts. For a lot of stores, the Christmas season is where they get 30% of sales and 40% of profits, the report said.
Moody's Investors Service Senior Analyst Charles O'Shea told Reuters, "Retailers recognize that consumers will wait as long as they need to." After conducting store checks in different cities, O'Shea noted that there were larger discounts given this weekend compared to the same period last year, the report said.
O'Shea added that the challenge is most felt by specialty apparel retailers. One of the stores that have the most obvious rise of price cuts is Abercrombie & Fitch, the teen apparel chain. Meanwhile, River Aeropostale Inc also tried to lure consumers with up to 70% discount on everything on Sunday as it tries to stop steep declines in its sales.
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