Deep Discounts Dent Holiday Shopping Profits
RENEE MONTAGNE, host:
Our business news starts today with a report card on retail sales. Holiday shoppers bought a lot of presents this year but it was not a very Merry Christmas for retailers. Sales were up but profits were down. Deep discounts in November led to steeper discounts in December.
Kurt Barnard is the president of Barnard's Retail Consulting Group. That's an organization that follows retail trends. He says even the post-Christmas buying binge may be too little too late for companies to reach their sales goals.
Mr. KURT BARNARD (President, Barnard's Retail Consulting Group): This holiday shopping season was an orgy of discounts, price breaks and big sales signs.
MONTAGNE: What possessed retailers to put on all these sales in November when they knew full well that December was coming up?
Mr. BARNARD: They did not want to run the risk of consumers turned away by high prices. Cause then when December comes around, the high prices will stick in the minds of people and they'll say, well, I can't really too much buy.
MONTAGNE: What products were tough sells? I've been reading about coats were not selling well. That's because the temperatures were very high.
Mr. BARNARD: That is correct. Who wants to try on heavy winter clothing when the temperature is 60 degrees range?
MONTAGNE: And what sold well?
Mr. BARNARD: Consumer electronics. You know, Renee, the thing is people did not buy a product, they bought a price.
MONTAGNE: How bad is this for retailers? Can they recoup come the winter and the spring?
Mr. BARNARD: No they really cannot. In January, spring merchandise begins to move into the store and room has to be made to accommodate the new spring merchandise.
MONTAGNE: Good for consumers, I suppose. More sales coming up.
Mr. BARNARD: For consumers it is a paradise.
MONTAGNE: Thank you very much for talking with us.
Mr. BARNARD: You are welcome. Happy New Year.
MONTAGNE: Happy New Year to you. Kurt Barnard is president of Barnard's Retail Consulting Group.