U.S. holiday sales may recover with help of deep discounts
By Nandita Bose and Nathan Layne
CHICAGO (Reuters) - Despite a disappointing Thanksgiving weekend, U.S. holiday sales may squeak by expectations if steeper and longer-running discounts lure enough shoppers.
An uptick in last-minute shopping trips on the all-important weekend before Christmas is likely to benefit consumer electronics chains like Best Buy (BBY.N: Quote) and home improvement retailers like Home Depot (HD.N: Quote) and Lowe's (LOW.N: Quote) the most.
Spending this year has been strongest in these segments, which have consistently offered the deepest discounts, industry consultants said.
On the other hand, apparel retailers are headed for one of their weakest holiday seasons in years. Millennial women are shifting their spending to items like smartphones, televisions and home goods, which are discounted most deeply around the holidays, at the expense of clothes, which go on sale year-round.
Overall, IHS economist Chris Christopher said he saw "momentum building" ahead of Dec. 20, or "Super Saturday," which is expected to surpass the Friday after Thanksgiving as the biggest shopping day of 2014.
Christopher pointed to a 3 percent rise in the ICSC-Goldman Sachs index of chain store sales for the week ended last Saturday as a sign of that momentum. He now believes sales during November and December, the most common definition of the holiday season for retailers, might beat his forecast for 4.2 percent growth.
The growing confidence comes as U.S. unemployment has fallen to a six-year low of 5.8 percent, long-stagnant wages have started to rise, and consumer spending showed signs of increasing during the first two weeks of December.
ShopperTrak, which surveys spending at brick-and-mortar stores, found that sales on Dec. 6 were 3.4 percent higher than the first Saturday of December a year earlier, founder Bill Martin said. This boded well for the remaining shopping days until Christmas, he said. Continued...