Retailers slash prices to entice holiday shoppers

Consumer spending during this holiday season has been lower than last year in sector after sector as shoppers retreat in the face of rising unemployment, tight credit and a crash in the housing market.

Oh, and the rough weather hasn’t helped either.

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Elissa Eubanks / eeubanks@ajc.com

Macy’s at North Point Mall in Alpharetta had sale prices on much of its merchandise, as did most other retailers.

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There are notable exceptions, like retail giant Wal-Mart and Internet store Amazon.com, which have gained sales.

Most retailer hopes now ride on a post-Christmas surge fueled by discount-driven shopping. And that Second Season started Friday.

Early.

Beth Birkholz arrived at North Point Mall in Alpharetta on Friday at 6:15 a.m. She raced into Macy’s, buying three children’s Christmas dresses and three children’s skirts for $50 —- that’s 75 percent off. Many other stores also opened in the predawn hours, and many furiously slashed prices. While turbo-discounting may undercut company profits, retailers prefer it to having merchandise sit.

Saisha Silmon of Morrow came to Clayton County’s Southlake Mall for an eye doctor’s appointment at VisionWorks, but slipped quickly into shopper mode.

“I realized there was a sale so I took advantage of it,” she said. “I found a couple of blouses for work at Sears for $2.49.”

And not low quality ones, either. Silmon’s wardrobe has to fit in with her job at a Buckhead property management firm. “These blouses were regularly $25-$30. I didn’t really need what I bought, but the price was too good to pass up.”

Bargains brought crowds to Gwinnett Place mall in Duluth. At some points, even overflow lots were packed. A procession of vehicles circled for open spaces.

“My Christmas is today,” said Lee Howell of Carrollton, who purchased a laptop at Fry’s. “It was one of those sales, where you come for something, and it was there.” Sales in the post-Christmas period have grown as a portion of total purchases for the past several years. While indications are that post-Christmas sales will sag, stores can only hope for a fresh flow of buying to bolster season results.

Retail sales during the holiday season this year were down 5.5 percent to 8 percent from the same period a year ago, according to SpendingPulse, a division of MasterCard Advisors that tracks sales.

Usually, even a bad year produces at least a small gain, thanks to population growth and inflation. And because retailers often reap between one-third and one-half of the year’s revenues after Thanksgiving, the impact of any drop is amplified.

Moreover, the SpendingPulse report includes grocery stores, which likely helped make results look a little better. On the other hand, if auto and gas sales were not counted, sales were down only 2 percent to 4 percent.

That is partly because gas prices plunged, falling from a crest of an average of $4.13 a gallon for regular in metro Atlanta last summer to $1.52 a gallon now.

And that has been a positive for consumers, because falling prices effectively added to the spending power of paychecks. Without it, consumers would have had even less to spend.

Not everybody has been hammered -— some have even prospered. The world’s largest retailer, Wal-Mart, has not released sales figures for December. But in November, Wal-Mart reported a 3.4 percent increase in same-store sales from the same period last year —- something similar is expected for this month.

An even more upbeat tale came from Amazon.com, which reported its best year ever.

Overall, online commerce did better than most other sectors —- a 2.3 percent dip for the season, but a 1.8 percent rise in the last two weeks before Christmas. Some of the online sales surely came at the expense of brick and mortar retailers.

Initial numbers from SpendingPulse showed sales:

• Down 20 percent at specialty apparel like Gap and Abercrombie & Fitch.

• Down 23 percent in women’s apparel.

• Down 14 percent in men’s clothing.

• Down 13.5 percent in footwear.

• Down 27 percent at electronics and appliance stores.

• Down 34.5 percent at high-end stores.

While retailers hope to make up ground in coming days, they are depending on consumers who are facing some of the worst economic headwinds in decades.

Unemployment has been climbing steadily since the recession officially began a year ago. During the current quarter, the economy is shrinking at a 4.5 percent clip, according to Moody’s Economy.com. That likely means more layoffs —- and other kinds of cost-cutting that eats away at paychecks.

The result is a growing pressure on millions of consumers to spend less.

For instance, Julie Smith of Jonesboro has seen her job in the office of a truck freight company cut by 28 hours a month. As she shopped at Southlake Mall on Friday, worry about finances was a constant companion.

Christmas was tight, she said. “Just the tree and turkey just about killed us.”

Even with discounts, prices on Friday were disappointingly high, she said.

She picked up a baseball cap for her husband and a bra priced at 50 percent off. “We got a few presents and today I was told not to buy anything, so I think I did pretty good.”

— Staff writers Kathy Jefcoats, Elissa Eubanks and Patrick Fox also contributed to this article.