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Retailers Pull Out the Stops to Lure Shoppers

Economy: Discount stores, slashing prices and extending hours, are expected to do well in a poor holiday season.

November 23, 2001|SHOBHANA CHANDRA | BLOOMBERG NEWS

U.S. retailers are taking no chances this Thanksgiving weekend: Many plan to open early, close late or slash prices to attract holiday shoppers.

Wal-Mart Stores Inc., the largest retailer, will keep stores open from 6 a.m. to 11 p.m. today and will offer special discounts. Kmart Corp., the No. 2 U.S. discount chain, is for the first time giving consumers 66 straight hours of shopping time, starting at 5 a.m. Friday.

Retailers are counting on the efforts to get cash registers ringing today, the start of the traditional holiday shopping season. Job cuts and fears of a recession made consumers even more hesitant to spend after the Sept. 11 terrorist attacks.

Consumers will be hunting for bargains, and retailers will try to get them into the mood to shop, analysts said.

"There are some great deals out there," said John Theiss, vice president of retail at American Express Co. Friday "will be an indication of things to come, will be the barometer for the retail industry."

About 42% of Americans plan to shop or browse for holiday gifts on the day after Thanksgiving, a study by American Express showed.

The Friday after Thanksgiving was the fifth-biggest shopping day during last year's holiday season, according to the International Council of Shopping Centers. The three-day Thanksgiving weekend generated 8.6% of holiday sales.

Low-price chains including Kohl's Corp. and Target Corp. will draw the most customers this weekend, and high-price retailers probably will suffer, analysts said. Wal-Mart said Friday's early-morning specials include a camcorder for $199 and a Hewlett-Packard Co. computer with color monitor, color printer and Microsoft Windows XP home edition for $698.

"Discounters will have a good Christmas," said analyst Brian James of Loomis, Sayles & Co., which owns shares of Federated Department Stores Inc. and Wal-Mart. "I don't think anyone would be surprised that it will be a lousy Christmas" for department stores.

U.S. retailers may have their worst holiday season in a decade this year as a "recessionary economy," fears about terrorism and the war in Afghanistan lead consumers to spend less, according to a study by America's Research Group Ltd. Toys, children's and men's clothes, and jewelry will top the list of the most sought-after gifts, the study showed.

A Bloomberg News survey this month found that only 7% of 1,200 adults polled will spend more on gifts this year, and 69% will spend about the same.

In such an environment, price reductions by retailers will be key to getting customers, said Britt Beemer, chairman of America's Research Group.

"If they give 50% off, malls will be packed all day," Beemer said.

About 80% of consumers said they will spend Thanksgiving at home, more than in previous years, Beemer said.

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