Post Christmas Shopping Sales

Post Christmas Retail Sales Strategy Lays Merchandise Minefield for Shoppers

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Post Christmas Shopping Sales

The week after Christmas accounted for 15% of retail sales in fiscal 2009 (Jan), and storekeepers are geared up for another wild ride this year. With one bad year behind them though, inventories were better managed across the retail segment this year. As a result, you are likely to find less storewide sales than you might normally expect, especially at the best-run shops like Wal-Mart (NYSE: WMT). Still, you can expect to find special sales on specific items, as smart retailers seek to lure you in before leading you to their regular-priced goods.

According to ShopperTrak, a research firm that tracks sales and traffic at more than 50,000 stores, the week after Christmas is pretty important. Bargain hunters drove 15% of the year's total sales in the post-holiday period last year. That was 2009 mind you, when unemployment was much lower than it is now.

Retailers saw their holiday sales drop by 3.4% in 2008, according to the National Retail Federation. The industry group expects 2009 period sales to dip another 1%, though forecasts vary widely across measuring sticks. Despite the expected double-dip in sales, ShopperTrak forecasts retailers' holiday profits will improve 1.6%, a contrast to last year's 5.9% slide. This comparison clearly illustrates adaptation within the retail space, as store operators managed inventory more tightly this year and geared toward lower ticket and value items.

In this post holiday shopping season, you can expect to find further adaptation of your retail enemy in the mall wars. Savvy storekeepers are offering targeted sales campaigns that are intended to lure you into their stores, where they plan to ambush you while you seek out those treasures. You should note highly promoted sales advertisements for specific goods, like at The Gaps' (NYSE: GPS) Old Navy outlets, where you can get jeans for $15 a piece. You will also surely hear about Sears' (Nasdaq: SHLD) 70% off coats sale, and Toys R Us and Wal-Marts' toy specials. On the web, Best Buy (NYSE: BBY) is selling the Dell Studio 17-inch notebook computer at $699, down eighty bucks. Oh yes, the deals are aplenty, but buyer beware! You are being set up, and many of you will fall into the savvy trap of retail strategists.

With inventory well-managed, retailers have no need to panic this year to move product before it becomes outdated, or to pay rent like the casualties of past years (recall Talbots (NYSE: TLB) and Circuit City). You may still see some storewide sales promotions, like that offered at J.C. Penney (NYSE: JCP), but these seem more likely for the competitive and tough department store segment. FYI: I view this as a sign of weakness, though it could also be a strategy (perhaps akin to Colonel Custer's); we would need a closer look-see.

In our concern for your wallet, and since we are competing for those limited funds these days as well, we offer this survival plan: Keep your focus while in enemy territory; don your impulse buying blinders; don’t look straight into the flashy promotional signs; and whatever the case, let somebody know where you are going and prepare a rescue team for your safe evacuation should you disappear in the merchandise minefield. Consider yourself warned!

Editor's Note: Article should also interest investors in Macy's (NYSE: M), Kohl's (NYSE: KSS), Nordstrom's (NYSE: JWN), Saks (NYSE: SKS), TJX Cos. (NYSE: TJX), Dillard's (NYSE: DDS), Bon-Ton Stores (Nasdaq: BONT), Cost Plus (Nasdaq: CPWM), Abercrombie & Fitch (NYSE: ANF), Aeropostale (NYSE: ARO), American Eagle Outfitters (NYSE: AEO), AnnTaylor Stores (NYSE: ANN), Bebe Stores (Nasdaq: BEBE), Buckle (NYSE: BKE), Casual Male (Nasdaq: CMRG), Chico's FAS (NYSE: CHS), Christopher & Banks (NYSE: CBK), Citi Trends (Nasdaq: CTRN), Dress Barn (Nasdaq: DBRN), DSW, Inc. (NYSE: DSW), Guess (NYSE: GES), Hot Topic (Nasdaq: HOTT), J Crew (NYSE: JCG), Jos A. Bank (Nasdaq: JOSB), Limited Brands (NYSE: LTD), New York & Co. (NYSE: NWY), Ross Stores (Nasdaq: ROST), Children's Place (Nasdaq: PLCE), Men's Wearhouse (NYSE: MW), Urban Outfitters (Nasdaq: URBN) and Wet Seal (Nasdaq: WTSLA).


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