Deep Discounts Draw Shoppers, but Not Profits

[DeepModem Mom]

Source: NYT, Page One

Sales in the nation’s stores were strong over the weekend, to the relief of retailers that had been expecting a holiday shopping period as slow as the overall economy. But while spending was up, there were troubling signs in the early numbers. The bargains that drove shoppers to stores were so stunning, analysts said that retailers — already suffering from double-digit sales declines the last two months — would probably see their profits erode even further.

Also, after shoppers flooded stores on Friday, foot traffic trailed off significantly on Saturday and Sunday.

Retailing professionals consider the weekend after Thanksgiving a barometer of overall holiday sales, which account for 25 to 40 percent of their annual sales. And in a year marked by an economic crisis, they are desperate for any signs that consumers are still willing to spend.

Their first glimpse came from two industry surveys released on Sunday. ShopperTrak, which does research for retailers, said sales increased 3 percent on Friday, compared with last year. The National Retail Federation, adding up sales Thursday through Saturday and projected sales for Sunday, said that each shopper spent about 7 percent more this year than last year....

***

Analysts said the discounts that drew in shoppers over the weekend were so steep that many ailing chains might be no better off in the long run. “You’re looking at discounts of 50 to 70 percent off,” said Matthew Katz, managing director in the retail practice of Alix Partners, an advisory and restructuring firm. “You have to sell two to three times as much to break even.”...

Read more: http://www.nytimes.com/2008/12/01/business/01shop.html?ref=todayspaper&pagewanted=all

[CBGLuthier]

1. Yep, that's what I did

I went Saturday afternoon and got some cheap blank CDs (50 for 5 bucks) and dual layer DVDs (15 for 9 dollars) from Office Depot.

That was all the shopping I did.

And if I had my druthers that would be it for the season but my wife does still plan to observe Xmas. I have been telling her for years I am sick of the damned holiday and this is the year we stop the stupidity of it all.

[HereSince1628]

2. Selling inventory is better than getting stuck with it.

Ever wonder why, begining a year or so ago the insurance companies started linking home owners insurance to credit score?
I have no doubt that they expected to witness an increase in suburban arson.

[HopeHoops]

3. I didn't leave the house on Friday. Had a wonderful time with the family instead. Spent $0.00.

[Phred42]

4. Just dumping inventory

Bet they don't replenish much after December

[madrchsod]

7. actually many stores have been dumping stuff in the last few months.

liquidation auction of merchandise to the secondary markets such as big lots or ebay stores has dramatically increased since sept.

you`re right--there`s not going to be much on the stores until spring.


january 20 2009

[ksimons]

5. I went out later in the day Friday, no one was still shopping

it was the early a.m. shoppers that made it look busy, but I think they grabbed all the cheap stuff and went home, but folks aren't buying up the regular-priced items and are going to wait until after xmas sales imho. our family has officially rescheduled any present-opening until New Years, because we'll have 5 days to really shop for what is reasonably priced items. we all agreed to wait to shop until sales after the 25th. Plus, it will make xmas night be more about family, enjoying each other's company, feeling the spirit of xmas and not 'presents' and hype.

[madrchsod]

6. china is in big trouble....the "nerf" factory had a riot last week

seems they had lay-offs and other problems that lead to workers "rioting". china needs to have a 7+% growth rate to stave off social upheaval in the cities and the rural areas.


so let`s keep shopping america so the chinese can have jobs and the commie government can stay in power!

[Blaze Diem]

8. My daughter went to work early Fri, dreading having to find a parking spot

in a parking lot full of early shoppers, as is always the case on black friday. She works at a mall retailer in Omaha.
She tells me she got to the mall to find NO long lines of people waiting to get in, and parked her car 6th from the front door.

It started getting busy around noon and tapered off to an average day by 4pm
Most people headed to the back of the store where the bargain racks are located.
She said her boss left early.

I foresee many bankrupt retailers after the New Year.

[Gman]

9. We bought a couple of bargains Friday

42" HD TV for $698 at Walmart (worth probably twice that), 2 gigs laptop memory at Office Depot for $38 (probably $200 value). Today I bought from Staples.com an 8 gig memory stick for like $17, and 2 8 gig SD memory cards for like $32.

In other words, I'm just taking advantage of their loss leaders which are supposed to entice you to buy more, but I'm not.

[SlicerDicer-]

10. HDTV was cheap. Depending brand I can see it though

All the other stuff those prices have been normalized at that level or lower for the past year at newegg.

[Gman]

11. Samsung

I think it was a pretty good deal.

[SlicerDicer-]

12. 42 inch samsung for 600... holy shit...

Good buy buddy :)

[Deja Q]

14. If the LCD TV brand starts with an "S", it's bound to be good:

Samsung
Sony
Sharp


For $700, yours was still a 720p model, but that's one heck of a price. I'd still recommend the extra warranty, but Samsung units are better built and are, generally, much better rated...

Wowzers.

[Gman]

16. We decided, for our use, 720p was fine

They also had some 42" and 46" 1080p's in LCD for less than $1000. But we decided the incremental cost versus the benefit for 1080p wasn't worth the extra $200 or so for what we do. Regular cable HD is no better in 1080p. The only real difference (the way I understand it) is in Blue Ray and gaming.

[Deja Q]

13. Was that TV the "Vizio" brand?

Not worth have what you paid; I've read many reports of units dying after 18 months, nobody thinks of 4 year extended warranties, and performance tests have shown poor black levels in that brand. (Videophiles and anyone using it as a computer monitor, especially for photo and graphic design work are best avoiding that brand. General use is great, but get that warranty.)

[eilen]

15. I was burned on a Black Friday TV deal

years ago. I purchased a tv from BestBuy that was one of their big markdowns and within the first year I had to get it repaired twice. It lasted 3 years. Prior to that we had a SONY that lived over 15 years. I guess they don't make them like they used to. Our current tv is one I got in trade with my brother-- he wanted a mini 13 inch to match the other one so his kids would stop fighting over the bigger screen. He got this one from a pawn shop. I think it is a 32 inch.

Enough of my tv tales of woe, I hope you have a better experience with your tv.