After a massive snowstorm blew away "Super Saturday," last-minute shoppers are expected to make up for the lost weekend and keep retailers' holiday sales even with forecasts, the National Retail Federation (NRF) announced yesterday (Monday).
The trade group stuck to its previous projections for a 1% drop from last year's levels, saying the weather wasn't bad enough to deter shoppers from bouncing back in the last days before Christmas.
"There are more than enough shopping days to make up any challenges due to weather in the east," Matt Rubel, chief executive officer of Collective Brands Inc. (NYSE: PSS), said in an e-mail to Bloomberg News. Kansas-based Collective Brands is the owner of the Stride Rite and Payless ShoeSource chains.
A record-setting snowstorm slammed much of the eastern United States on Saturday, forcing numerous stores in the Mid-Atlantic region, especially around Virginia and Washington, D.C., to close early. Washington was blanketed with 16-inches of heavy snow and more than a foot fell on Philadelphia, parts of Long Island and Cape Cod.
The storm also snarled transportation nationwide and a minor fire at Macy's Inc.'s (NYSE: M) New York flagship store added to the mess. Airlines canceled thousands of flights as blizzard conditions pelted the coast. UAL Corp.'s (Nasdaq: UAUA) United Airlines said it canceled about 1,000 flights over the three-day period.
The last Saturday before Christmas is often the biggest shopping day of the year with shoppers spending an estimated $15 billion at retail outlets. The Northeastern corridor, stretching from Virginia to Massachusetts, accounts for at least 25% of those sales, The Wall Street Journal reported.
"In parts of the country, this set us back to last year," when there was one less day between Super Saturday and Christmas, Madison Riley, managing director at consultancy Kurt Salmon Associates told The Journal.
Some retailers may extend promotions into Monday and Tuesday to attract shoppers they had hoped to get during the last weekend before Christmas, NRF spokeswoman Ellen Davis told Bloomberg.
Target Corp. (NYSE: TGT) extended store hours in states affected by the storm through Wednesday.
"The majority of our stores in hard hit areas will open one hour earlier than originally planned and remain open until midnight," Troy Risch, its executive vice president of stores told The Journal.
But many snowed-in shoppers were undeterred by the weather and got their shopping done on their computers.
Online bag seller eBags Inc. reported steady sales increases throughout Saturday, said Peter Cobb, senior vice president of marketing. Neel Grover, the chief executive of Buy.com Inc., said sales on Saturday were as strong as they have been for the whole season, helped by a combination of the weather and a free two-day shipping promotion.
The biggest winner appeared to be Amazon.com Inc. (Nasdaq: AMZN), which increased its share of site traffic among the top 500 retailers by nearly 31% in the week ended Dec. 12. That's more than double No. 2 Wal-Mart Stores Inc., which recently launched aggressive price wars with Amazon on books and video games among other products.
Brick-and mortar stores have struggled this year to keep sales even with 2008. But online retailing grew 4% from the beginning of November through Dec. 18 to $24.8 billion, according to Web tracking company comScore Inc. (Nasdaq: SCOR). Online sales on Dec. 15 totaled $913 million, marking a one-day record for the industry, the company said.
E-commerce accounted for 6% of all U.S. retail sales excluding cars, travel and prescription drugs in 2008, and could end the holiday season this year representing about 7%, Sucharita Mulpuru, an analyst at Forrester Research Inc. (Nasdaq: FORR) told The Journal.
"Price and convenience are probably the biggest factors-you can often save money shopping online," she said.
Online sales will likely reach 10% of all retail for the holidays, she added.
News & Related Story Links:
- Bloomberg News:
Last-Minute Holiday Shopping May Counter Snowstorm. - The Wall Street Journal:
Buyers Undeterred by Snow Storm. - The Wall Street Journal:
As Stores Sputter, Sales Sizzle Online.