Desperate retailers seek holiday season rescue
Steven Dennis, executive-in-residence at Southern Methodist University's JC Penney Center for Retail Excellence, says retailers' price cuts may be deep this holiday season but not as broad as some might expect.
By Rob Lever
WASHINGTON (AFP) – US retailers are taking desperate measures to spark holiday sales in the face of what promises to be another troubled year-end shopping season.
Merchants are furiously working to ramp up consumer interest ahead of "Black Friday," on November 27, the day after the Thanksgiving Day holiday that marks the traditional kickoff of the holiday gift season.
Some are promising price cuts of 50 percent or more on some hot electronics, and planning for big events to bring out shoppers for big sales promotions.
Analysts say retailers are struggling to find the right balance of inventories and discounts while cautious consumers are hesitating about how much and when to buy.
Clothing retailer Gap has started early with 25 percent discounts, while Wal-Mart and Target are offering online shoppers free or discounted shipping on many items. JC Penney is boosting Black Friday promotions and will open its doors at 4 am for the best deals.
Steven Dennis, executive-in-residence at Southern Methodist University's JC Penney Center for Retail Excellence, said price cuts may be deep but are not as broad as some might expect.
"I think most retailers are desperate for market share," he said. "Everyone seems to have the view that business is gong to be flat and it is a battle for market share."
But Dennis said retailers are not in the dire position of last year, when they had large amounts of inventory. So price cuts will mainly be on a few high-profile items to get consumers into the store "and hope they get a disproportionate share of their spending."
"I don't think deals will be so widespread."
Dennis said that with retailers focused on lean inventories, most will be able to post profits even if sales are lower than in 2008.
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