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Day-after-Christmas sales: Stars are aligned for a super Sunday

This year, day-after-Christmas sales are expected to be even more festive than usual. Fortuitous timing and Americans’ renewed willingness to spend should cap the improved retail season. By Ron Scherer, December 24, 2010

1224_Sale_standard_600x400The presents haven’t been unwrapped yet. No one has pulled out the stocking stuffers hanging by the fireplace. But most people, it seems, are already dreaming of the day-after-Christmas sales, when retailers get serious about reducing prices.

Charles Van Stone in Shepherdstown, W.Va., will be shopping for expensive car waxes. Karen Audet of Ft. Lauderdale, Fla., plans to hit Neiman-Marcus for designer Christmas tree ornaments. And, Garden City, N.Y., resident Tracy Murtagh expects to bring her two nieces into New York to shop for discounted clothes at a department store. Such shopping would ordinarily just “pad the numbers of a successful holiday season,” says Scott Krugman, a spokesman at the National Retail Federation in Washington. But because the day after Christmas falls on a Sunday, Mr. Krugman anticipates even larger crowds than normal. “There is a confluence of events in terms of returns, gift card redemptions, and clearance that will make it a perfect storm in terms of customer traffic,” he says.

However, even with this influx of shoppers, Mr. Krugman says, it is doubtful the day’s sales will be larger than last Saturday’s, referred to by retailers as Super Saturday, or Christmas Eve, often referred to as “Father’s Day,” for the men who wait until the last minute to shop. The National Retail Federation had forecast a 3.3 percent gain in holiday sales this year over last, but some other retail analysts suggest it will be more like a 5 percent gain. That is in large part because shoppers appear to have lost some reticence about spending money.

On Thursday, the Reuters/University of Michigan survey of consumer sentiment hit its highest level since June. “Consumers have become more optimistic in their outlook,” wrote Chris Christopher, an economist who covers consumers for IHS Global Insight in Lexington, Mass., in an analysis on Thursday.

A better mood

He attributes the better mood to an improvement in the jobs market, a good stock market, low interest rates, an easing of credit conditions and, of course, discounting by retailers. Shoppers hitting the stores on Sunday will also be returning a lot of gifts. “It becomes a logistical nightmare trying to sort out what people get credit for and what needs to be disposed of,” says Los Angles-based Jacques Stambouli, CEO of Via Trading Co., a liquidator who buys the returned merchandise.

In past years, the biggest returns have been electronics, he says. “Most of the time it’s because people aren’t sure how they are supposed to work,” he says. This year, so far, retailers are seeing more returns of the new 3D TVs, he says. “People can’t figure out which buttons you have to push to make it work,” he says.
But for the most part, shoppers will be hitting the malls looking for deals. They won’t be disappointed, says Krugman. “Retailers will be trying to move a lot of seasonal merchandise such as apparel, gift wrapping, and holiday cards,” he says.

That’s what Ms. Audet is expecting in her quest for designer ornaments. In the past, stores have discounted some products by 50 to 75 percent off their normal price, she says. But, she adds, she has to get to the stores early to get the best deals. “It is really a race up the escalator,” she says. Mr. Van Stone says he’s had some good fortune buying on Dec. 26. Last year, he and his wife, Carol, purchased a new Buick LaCrosse, General Motor’s new sedan. “Normally, they don’t discount those cars, but they did discount it,” he says.

‘Shop for yourself’

In New York, Ms. Murtagh plans to give her 11- and 14-year-old nieces visiting from South Carolina a chance to “get the whole New York shopping experience.” But she plans on shopping herself for personal items. “You know the things we have been forcing ourselves not to buy before Christmas,” she says with a giggle. “Now you get to go back and shop for yourself after the fact.” For retailers, such shopping is essential, says Linda Day, owner of Arabella, a boutique and dress store in McKinney, Texas. She plans on reducing prices storewide by 20 percent, and expects the sale will attract women looking to buy New Year’s Eve dresses, plus a lot of tourists traveling from Dallas to visit the historic downtown. She says reducing inventory is important since in January she will travel to various trade shows to buy new apparel and other merchandise. “In January we’re spending a ton of money, so we like to have a little something in the bank,” she says.

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