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Posted on Sun, Dec 13, 2009 : 6:02 a.m.

Retailers turning to discounts in final days of holiday shopping season

By Paula Gardner

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Karen Werstein of Maybee shops amid many sale signs in the DVD aisle at Target on Waters Road in Pittsfield Township.

Angela J. Cesere | AnnArbor.com

The sale signs at the Target store on Waters Road tell the story of the holiday shopping season.

There are more than in 2008.

The discounts are steeper.

And the special deals - like when shoppers get a store gift card after they purchase certain items - show how retailers are using strategies besides temporary price cuts to attract buyers.

“Our sales have a lot better deals than last year,” said Lori Lee Anderson, assistant manager at the Pittsfield Township store. “I think that’s why we’re bringing more people in here.”

That’s the goal at this point in the holiday shopping season, when three weekend days - counting today - remain for retailers for generate sales before Dec. 25.

Traffic at Ann Arbor area stores was brisk on Saturday, one week before the so-called “Super Saturday” on Dec. 19, which likely will be among the top shopping days of the year, behind the day after Thanksgiving and Dec. 26.

So far, national sales data leaves retailers wondering if they’ll manage to exceed 2008’s holiday totals, which fell 8 percent last December up until the day before Christmas.

And that leaves consumers wondering just how deep retailers will let the discounts go from this point on.

“It’s going to be a game of cat and mouse,” said Jennifer Cherry, a vice president at Marx Layne & Co. in Farmington Hills.

According to one national survey: “More shoppers are waiting for better deals and stores just aren't giving them big enough discounts.”

That assessment, from a Dec. 7 survey by America's Research Group and UBS, was followed late last week by more data from the same group that said:

• Nine of 10 people waiting to finish their holiday shopping are doing so to get discounts of at least 50%.

• And one-third of respondents wanted savings of at least 70 percent.

Consumers already have been aggressive about bargain-hunting during the holidays.

Even on Black Friday, more shoppers hit the stores than in 2008 - but, on average, they spent less.

Most national retailers projected a dip in sales during the week after Black Friday, experts said, but as of Dec. 6 started to pick up the pace of markdowns.

This weekend, even more aggressive discounting began, with some national stores - like Sears- announcing a return to Black Friday prices.

“We’ve got a good level of discounting,” said Tom Scott of the Michigan Retailers Association.

And for the next few days, he said, retailers will be looking at sales results for the first two weeks of December - and possibly stepping up the discounts, if results haven’t hit projections.

“Depending on how the season is going, we’ll have more of a big wave at the end,” Scott said.

Promotions at national stores that start today include:

• More gift cards offered with purchases.

• A new wave of coupons in fliers and emails for one-time discounts at stores like Old Navy and Borders.

• Multiple one- or two-day only sales at stores like Toys R Us, JCPenney and Kohl’s.

Michigan-based Meijer Inc. will continue its strategy of continuing price drops - particularly on toys - and promoting sales, including items that will be paired with gift cards, said spokesman Frank Guglielmi.

The private company doesn’t release details of its strategy or earnings, he said. But Meijer is able to change direction to respond to sales trends. He described the company as nimble.

“Most retailers go into the holiday with a specific strategy,” Guglielmi said. “…Ours is fluid. We’re able to adjust quickly based on what we’re seeing with customers.”

Many customers have spent the year worrying about high unemployment numbers in Michigan and national economic uncertainty.

And while Ann Arbor-based retail consultant Becky Maccardini said many shoppers may feel more confident now that unemployment is leveling off and data shows some economic rebound, they’ve also spent a year watching sales seem unending.

Discounting this season, she said, “is fairly aggressive. But people may feel like it’s supposed to be more aggressive because we’ve had sales all year long.”

If inventory isn’t moving, discounts will get more aggressive, Maccardini said.

“We’re likely to see one more big cut,” she said. “But we’ll see it on a lot less merchandise.”

Meanwhile, Cherry cautions that many retailers cut their holiday inventory this year - so selection could be impacted by increasingly brisk sales and steep discounts.

And while some shoppers may be waiting to see what kinds of discounts come out in the next 12 days, Scott said that prices - among national chains and the state’s independent stores - are already competitive.

“I think a shopper can find a good deal out there anytime this season,” he said. “… They’re definitely out there.”

Paula Gardner is Business Director at AnnArbor.com. Contact her at (734) 623-2586. Erica Hobbs contributed to this report.

Comments

John Galt

Sun, Dec 13, 2009 : 4:03 p.m.

More bankruptcy will be seen after this (the 2nd in a row) dismal shopping season. The lies the media are touting about economic recovery will be exposed. Unless you are a big bank, little of the stimulus spending went to you. Of course, you may have bought a subsidized car or house recently. That just soaked-up what little demand existed--drawing forward sales. Unless the government keeps artifically pumping freshly borrowed dollars into the "economy," we are going to have a double dip recession. Higher taxes (additional healthcare spending, cap-and-trade, local millages, etc.) are ahead. And the baby boomers are rapidly approaching retirement age, which will collapse the government's finances further. I suppose we can all work for the collective and be taxed 100 percent to pay for everything, but that sounds like the old USSR. Is that where we are going?

bunnyabbot

Sun, Dec 13, 2009 : 1:10 p.m.

shop small independantly locally owned businesses! often you will meet the owner working there themselves!