ATLANTA — Retailers have thin inventories after coming out of Christmas with slightly better-than-expected sales.
Some retailers kept inventory so low they’ve had to bring in new merchandise to restock shelves, a rare move this soon after Christmas.
That’s good news for their bottom lines. But it means slim pickings for shoppers hoping for after-Christmas clearance sales.
“Retailers are much more nimble this year,” said Marshal Cohen, the chief retail industry analyst at Port Washington, New York-based NPD Group Inc. “Their ‘Plan B’ is to have new receipts at the ready.”
Cohen said he noticed J. Crew and Coach were two that had restocked shelves with new items last week.
Because their ordering was in line with weak demand, retailers were able to sell more items at higher prices, which is critical to profits. Last year, profits were hammered by fire-sale discounts to get ridof the excess.
“The latest holiday shopping season wasn’t a rip-roaring success, but at least it met or slightly exceeded expectations,” said John Lonski, chief economist of Moody’s Capital Markets Research Group. “Consumer spending is indeed in a recovery mode, which brightens prospects for 2010.”
Spending rose 3.6 percent in November and December, according to MasterCard Advisors’ SpendingPulse, which estimates all forms of payment including cash. Adjusted for an extra shopping day between Thanksgiving and Christmas, the number was closer to a 1 percent rise. That was still better than the flat sales analysts had predicted.
A jump in purchases the week before Christmas helped year-over-year electronics sales increase 5.9 percent from Nov. 1 to Dec. 24, MasterCard Advisors’ SpendingPulse said in a statement. Jewelry and luxury sales also gained, the research firm said.
Consumer sentiment for higher-income folks has been improving faster as of late,” David Schick, an analyst with Stifel Nicolaus & Co., said in a telephone interview Monday “That is driving some of the better spending coupled with the fact that we are comparing with a dramatic drop-off in the more discretionary categories last year.”
Some retail stocks rose Monday. Wal-Mart shares gained 38 cents to close at $53.98. Macy’s Inc. shares rose 39 cents, or 1.08 percent, to $17.96. Little Rock-based Dillard’s Inc. saw shares up 25 cents or 1.26 percent to close the day at $20.02.
“Holiday 2009 can be described in one word, ‘adequate,’” Cohen said Monday.
After-Christmas traffic also appeared to be relatively robust, though it wasn’t clear how much people were actually spending.
Roth Capital Partners analyst Elizabeth Pierce said she visited six malls Saturday in southern California and saw many shoppers without bags. It’s likely shoppers who went looking for bargains left without buying much, she said.
Bessie Lyles of Huntsville, Ala., arrived at Lenox Square Mall in Atlanta at 6 a.m. to hunt for deals. The 57-year old left Macy’s with two tops,sweaters and two pairs of jeans, including one pair for $4, marked down from $34.
To entice shoppers like Lyles through the rest of the week and into January, retailers are expected to steeply discount what leftovers they do have.
After last year’s dismal season, when unplanned discounts 70 percent off or more began appearing well before Christmas, retailers vowed they wouldn’t get caught that way again.
This year the tight control let retailers mostly keep discounts planned, said FBR Capital Markets analyst Adrienne Tennant.
A better picture of how retailers fared during the Christmas shopping season will be known Jan. 7, when many report December sales.
Information for this article was contributed by Mae Anderson of The Associated Press and by Cotten Timberlake and Linda Sandler of Bloomberg News.
Business, Pages 25 on 12/29/2009