US retailers in battle at dawn

Retailers, smarting after a weak Christmas selling season, stepped up efforts to lure bargain-hunters on Friday, with large stores opening at dawn across the US and shoppers being promised extra discounts if they spent money before lunchtime.

Even with the deep discounts ahead of Christmas, the latest analysis of retail sales indicate that the 2008 shopping season has been one of the most difficult in decades.

In depth: US downturn - Dec-09Finance workers wary as downturn hits Boston - Dec-26Headhunters feel the squeeze as jobs are axed - Dec-26Ski resorts fret about economic chill - Dec-26UK retailers braced for ‘horrible’ year - Dec-26Retailers responded on Friday by slashing prices even more and opening their shops for longer.

JC Penney opened some of its 1,000-plus department stores at 5.30am, the earliest opening on the day after Christmas in the company’s history. In a novel move, the retailer offered customers the chance to sign up for wake-up calls to their mobile phones.

Macy’s opened its flagship department stores in New York and San Francisco at 6am on Friday. Full-page adverts in newspapers on Christmas Day spelled out the many bargains to be had, such as an offer by Brooks Brothers for an additional 15 per cent off purchases made before 1pm on Friday.

Yet Brooks Brothers on New York’s Fifth Avenue did not appear particularly busy on Friday morning, with no queues of people waiting to pay. Although there was a steady stream of tourists in the famous midtown Manhattan shopping district, many appeared to be shopping only with their eyes.

“It is much quieter than usual, shopping is much easier this year,” said Bruce Lewandowski, a New York resident who was shopping at nearby Saks Fifth Avenue, which opened at 8am.

Retail sales over the period, excluding petrol, fell as much as 4 per cent, according to SpendingPulse, which tracks US retail spending.

Luxury sales were hit worst, down more than 34 per cent compared with last year, SpendingPulse said. Electronics fell over 26 per cent, with sales above $1,000 particularly weak relative to last year.

Despite a steady increase in pre-Christmas bargains, these offers do not appear to have made up for the overall reduction in spending. Poor weather and widespread snowstorms have further discouraged shoppers in many parts of the US.

Retailers are trying to make up for the loss by luring shoppers looking for post-Christmas bargains.

One shopper said he was planning to go to Macy’s on Friday, but only to return Christmas gifts that he did not like. “It will be crazy due to all the discounts. I think lots of people will be returning gifts and then looking for bargains,” he said.

Discounts are now expected across the board. “I’m not interested in 60 per cent off a candle, but would be interested in 60 per cent off [designer clothing],” said John Thalman, who was also shopping in Saks.

Hopes that online shopping had fared better amid the wider retail gloom gained some support on Friday with the news that Amazon, the world’s biggest web-based retailer, had taken in 17 per cent more orders on its busiest day of the Christmas period than it had the year before. Other internet retailers did less well than Amazon, which was helped by heavy price discounting and shipping offers. By the beginning of this week, online sales in the US, the world’s biggest and most mature market, had slipped 1 per cent compared with a year before, according to figures from ComScore, the internet measurement company, although direct comparisons were complicated by the shorter shopping season this year.

Copyright The Financial Times Limited 2008

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