Executive Briefings

Heavy Discounts Pumped Up Holiday Sales, But Hit Retailers in the Pocketbook

Many retailers delivered solid sales gains for December, but heavy discounts needed to get shoppers to buy exacted a high price, clouding the holiday shopping season.

Merchants had to mark down coats and other gifts to get shoppers to buy in a challenging economy. A mild start to winter also didn't help, wilting shoppers' appetite for cold-weather merchandise. That resulted in a string of retailers reducing their earnings outlooks.

The need for discounts is also raising concern about what it will take to get shoppers to spend again in coming months.

Retailers collectively reported a 3.5-percent increase in monthly revenue at stores open at least a year - an indicator of a merchant's health, according to the International Council of Shopping Centers' tally of 25 merchants.

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Many retailers delivered solid sales gains for December, but heavy discounts needed to get shoppers to buy exacted a high price, clouding the holiday shopping season.

Merchants had to mark down coats and other gifts to get shoppers to buy in a challenging economy. A mild start to winter also didn't help, wilting shoppers' appetite for cold-weather merchandise. That resulted in a string of retailers reducing their earnings outlooks.

The need for discounts is also raising concern about what it will take to get shoppers to spend again in coming months.

Retailers collectively reported a 3.5-percent increase in monthly revenue at stores open at least a year - an indicator of a merchant's health, according to the International Council of Shopping Centers' tally of 25 merchants.

Read Full Article