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Holiday sales are OK

Monday, December 30, 2002

Brazil store managers aren't giving high fives over Christmas sales, but they aren't discouraged either.

The Brazil Times interviewed managers of local stores to see how Brazil retail merchants fared during the Christmas shopping season. The news was dismal across the nation, leading merchants to fear this would be the weakest holiday shopping season in 30 years.

By a 54-46 percent margin, The Brazil Times online poll indicated shoppers planned to spend less this year than for Christmas in 2001. The poll was unscientific.

The merchants we spoke with were breathing a sigh of relief and were optimistic because local Christmas sales went against the national trend.

Glik's manager Lisa McKean said the local Glik's strongest sales came in the last couple days before Christmas. Surprisingly, it was not men who waited until the last minute to shop, but women.

After Christmas sales have been good.

"We are maintaining" rather than losing sales over a year ago, she said.

Brazil Wal-Mart store manager Russell Long said he could not reveal specific numbers, but characterized Christmas sales by saying, "We didn't do as well as last year," albeit the store's sales were just "slightly less" than a year ago.

The after-Christmas sales were stronger than a year ago, largely because Wal-Mart doesn't mark down many items before Christmas. Customers responded well to the after-Christmas sales prices, Long said.

Electronics and toys were the local Wal-Mart's best selling items, though electronics do well year round, he said.

While the Brazil store's sales were slightly down, nationally, Wal-Mart Stores Inc. said same-store sales for December have been tracking at the lower end of its goal for a 3-5 percent gain.

Kris Miller, manager of Cato's in Brazil, said the past two weeks have been good for the store. In fact, Christmas week saw sales up 62 percent over the same week a year ago.

"This year, the week before Christmas, we were up," she said. "But, for the year we are down, maybe 5 percent."

And, the local Cato store gains were not hurt by after-Christmas returns.

"The returns have been steady, but not overwhelming," Miller said. "People are exchanging more, rather than returning items."

The Brazil Cato store's clearance rack helped sales significantly, she said. Miller believes clearance items stemmed the sales decline seen nationally.

Despite a better-than-expected surge following Thanksgiving, customers around the U.S. have been reluctant to spend, uninspired by the lack of must-haves and stymied by worries about the economy. The compressed season -- six days shorter than a year ago -- also had an impact on consumers, who never quite recovered from the lateness of Thanksgiving and seemed to delay their gift buying even more than usual.

As a result, merchants counted on procrastinators like Beverley Houghton of West Orange, N.J. to boost holiday sales. She said she always finishes this late, and this year, she spent about the same as last.

"I'm hoping to get a sweater and a gift card and I'm out of here," Houghton said at Essex Green Shopping Center in West Orange.

At Circle Centre Mall in Indianapolis, Melanie Rominger was piling stocking caps onto her already growing stack at Abercrombie & Fitch before Christmas.

"I got shirts for $10 and pullovers for $15. So it's really good," the Indianapolis resident said.

Rominger said she spent more this year than in the past.

"I keep the economy running," she said.

Christmas Eve day accounts for only about 4 percent of overall holiday sales, according to C. Britt Beemer, chairman of America's Research Group. According to the International Council of Shopping Centers, Christmas Eve day was the seventh busiest holiday shopping day last year.

Still, the week before Christmas has become increasingly critical. Last year, it accounted for 34 percent of holiday sales, compared with 23.9 percent in 1999, the trade association said.

Since at least 1996, the Saturday before Christmas has been the business holiday shopping day. That trend continued this year, though the weekend's sales weren't as robust as expected.

Several major merchants, including Target and J.C. Penney, reported that much-hoped-for sales momentum failed to materialize.

Federated Department Stores, whose stores include Bloomingdale's and Macy's, said sales in the seven days that ended December 21 "did not strengthen as much as anticipated."

As a result, it warned that sales for November and December at stores opened at least a year, known as same-store sales, likely will be even further below its previous estimate. The company had expected sales to be flat or decline 2.5 percent from a year ago.

The latest round of disappointing news from retailers has led analysts like Michael P. Niemira, vice president of Bank of Tokyo-Mitsubishi Ltd. to further lower holiday forecasts. Niemira now estimates that same-store sales for November and December combined will be up only 1.5 percent, down from his already reduced forecast of 2 percent.

That would be the weakest gain since 1970, he said. Last year, holiday same-store sales saw a 2.1 percent increase over the prior year.

The Associated Press contributed to this report.

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