While it's been the Christmas that most retailers want to forget, with some stores marking items down 60 percent or more, consumers are eager to see how deep the post-holiday discounts will go, starting today.
"Consumers, honestly, they have no problem spending right now if the price is right, and unfortunately, the price is rock bottom," said Ellen Beeson Zentner, senior economist for the Bank of Tokyo-Mitsubishi UFJ. "You can't believe that (retailers) are not pressing their margin down to nothing."
Today, JC Penney will open at 5:30 a.m., the earliest time ever in the company's history, and offer more than 100 early-bird specials — double the amount from a year ago.
Macy's will open at 6 a.m. today and offer discounts of up to 75 percent off on selected designer apparel brands, compared with the 50 percent to 60 percent price cuts before Christmas.
And retailers like Ann Taylor Loft didn't even wait until after Christmas was over, starting its after-holiday sales of up to 70 percent off on dresses, pants and sweaters earlier this week.
"The main thing that we tried to shout in all of our advertising is value. We realize the position our consumers are in," said Denise Mann, manager of the JC Penney in CoolSprings Galleria. "We definitely made an effort to get more coupons in customers' hands."
Mann said that overall during the holiday shopping season sales were down compared with last year and the store ordered 15 percent less winter merchandise this year in preparation for weaker sales.
At women's apparel store Cato at RiverGate Mall in Goodlettsville, some items that have already been marked down 25 percent off will be discounted an additional 25 percent or more at the store's after-Christmas sale that starts Sunday.
This year, more shoppers have been browsing through the store's clearance racks, looking for deals, said store manager Kristi Stegall.
"I think the sales are already so good that they are probably even waiting for a better markdown," Stegall said.
Anaxet Jones, a 29-year-old attorney shopping at the Mall at Green Hills on Christmas Eve, said she planned to go shopping for herself for items such as DVD players and kitchenware after Christmas when she anticipated the sales would get better.
Even though some stores at the mall on Wednesday were already advertising up to 70 percent off, Jones said she was skeptical about those prices.
"There's a part of you that wonders how good the discounts are," Jones said. "This is why I want to do the bulk of my shopping after Christmas."
Buyers lack confidenceIt's been a rough quarter for retailers this year, as many consumers scaled back on their purchases and waited until the last minute to look for bargains.
"When the economy is down in the dumps, it's hard to muster up that excitement for Christmas," Zentner said.
"Christmas takes on a different meaning. It starts to feel more like a burden. … Rather than (having the) excitement of buying a hot toy for your kid, you're more dreading opening your wallet."
Retailers are eager to move discounted Christmas items off their shelves to make way for spring merchandise that can be sold at a higher price and will continue to slash prices to get consumers to buy, analysts said.
"Christmas 2008 for the retailers will likely go in the history books as one of the noteworthy negative notes," Jennifer Black, president of research company Jennifer Black & Associates, said in a research note.
"More importantly, however, it may go down as one in which the consumer psychologically reached a tipping point in which enough was really enough."
Black said the lackluster shopping season won't mean the end of retailing, but it will mean the "intensification of more focused, deliberate, budget-based consumer spending."
The one retailer that has been unanimously identified as a winner this Christmas was discount retailer Wal-Mart, whose same-store sales were up 3.4 percent in November compared with a year earlier, and were expected to be in that range for December as well.
Britt Beemer, chairman of America's Research Group, said he expected Christmas retail sales to fall 2.8 percent compared with last year.
Next year may be worseThe bleak holiday sales foreshadow even worse sales in 2009 for retailers, Beemer said.
"It's going to be a disaster," Beemer said. "We're going to see negative sales next year."
Beemer listed 10 troubled retailers, including stores such as Macy's, Dillard's and Belk. Beemer said stores on this list did not appeal as much to consumers for a variety of factors that could include merchandise, pricing and customer service.
Sarah Boyce, owner of boutique Fabu on Charlotte Pike, said she would spend part of her Christmas Eve evaluating how much to discount certain items at her store after Christmas. Sales during the holiday shopping season there were down
20 percent.
Boyce said this holiday that she had more consumers visiting her store for items under $25, such as scarves, leaving her with customers spending lower amounts per purchase. She plans to focus on buying more affordable items for her store next year.
"We're as cautious buying it as the folks who are buying from us," Boyce said. "We're taking a look at how much it costs."
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