GO
Loading...

Sleigh full of deals to follow slow shopping season

Natalie DiBlasio
Tuesday, 24 Dec 2013 | 5:42 AM ET

Shopping in stores just crawled along this holiday season, leaving a pile of unsold inventory. That means bigger-than-usual after-Christmas sales.

You don't even have to wait until the 26th.

"Promotions have already crept into the irrational zone — north of 50% off," says Brian Sozzi, CEO of Belus Capital Advisors. "The season so far was a full-on Debbie Downer. After Christmas a black plague of promotions will sweep throughout the malls and stores — 50, 60, 70% off."

(Read more: As the clock ticks, retail traffic continues slide)

Amazon.com's "2013 After-Christmas Sale" is already rolling with such offers as 70% off on select clothing, shoes, watches and jewelry. Old Navy launched its "After Holiday Sale" on Sunday with markdowns up to 75%.

Shoppers at a Toys R Us store in Arapahoe County, Colo.
Karl Gehring | The Denver Post | Getty Images
Shoppers at a Toys R Us store in Arapahoe County, Colo.

Sales growth this year is likely to be the weakest since 2009: 3.2%, says Chris Christopher, director of consumer economics at IHS Global Insight.

"Overall, the holiday retail sales season is not the best," he says. "Online is up tremendously from where it was five years ago, but everyone is hurting on the margins because of the discounting and the free shipping."

Holiday online retail sales are projected to grow 13.5% over last year, Christopher says.

For the last full week of shopping Dec. 16-22, in-store retail sales were down 3.1% from the same week last year, according to ShopperTrak, which analyzes retail shopping trends.

(Read more: Banks could sue over Target card breach)

"Traffic is down dramatically, and that's driven by the ability to virtually window shop," says ShopperTrak founder Bill Martin. In fact, the number of people visiting brick-and-mortar stores was down 21.2% from the same period in 2012.

"Being a 26-day season rather than a 32-day season has just been a huge difference," says Brad Wilson, editor in chief of BradsDeals.com. Retailers "are going to have to pick up a lot on the back end."

Wilson says the big sales have pros and cons. Pros: Huge discounts — sometimes more than 70%. Cons: Merchandise will be random — whatever is left.

"We have become so sensitized to discounts, so retailers now have to be very aggressive to get our attention," Wilson says.

Holiday retail: Where shoppers are spending
CNBC's Julia Boorstin looks at winners and losers so far this holiday season, and which retailers are offering the deepest discounts.

One area where sales are looking up: mobile shopping. About 18% of online holiday purchases were made on mobile phones, up from 12% last year, says Corey Pierson, CEO of Custora, which tracks data from more than 100 online retailers.

Online and mobile sales are putting brick-and-mortar stores in a pinch. "They are not only competing with each other, they are competing with with cyber-stores too," Christopher says.

For retailers, the next job is getting customers back into their stores after the Christmas rush — a difficult task, says Steven Keith Platt, director of the Platt Retail Institute.

(Read more: Returning Xmas gifts? Better hurry up!)

"People just aren't spending," Platt says, "and retailers are having to deal with that. They have to aggressively push these huge discounts and just hope they can extend out the holiday."

Target, which suffered a data breach on 40 million credit card accounts, had even more bad news after trying to make up for that damage with a storewide 10% discount this weekend.

The number of transactions at Target slipped 3% to 4% on Saturday compared with the Saturday before Christmas last year, says Craig Johnson, president of retail consultancy Customer Growth Partners.

"Virtually everybody that they compete against — Walmart, Kohl's, Costco — was up, and they were down," Johnson says.

By Natalie DiBlasio of USA Today

  Price   Change %Change
AMZN
---
GPS
---
TGT
---
WMT
---
KSS
---
COST
---

Featured

Latest Special Reports

  • The day you stop working will be here before you know it, making preparation now key to enjoying your golden years.

  • Is an active twist on passive investing the right portfolio move? An inside look at the rise of ETF strategists.

  • Simplifying news on the clock.