Gift Cards Are Retailers' Last Chance for a Happy Holiday

The books are closed on the holiday shopping season, and researchers from ComScore to the National Retail Federation are adding up the final numbers, which will probably start to trickle out this week. Based on the figures through last weekend, sales in bricks-and-mortar stores might be up 1% from last year -- or down 1%. E-commerce sales, on the other hand, appear to have been higher by as much as 4%. But the online numbers may not be much comfort to the big store chains because cyber sales account for only a small fraction of their total revenue.%%DynaPub-Enhancement class="enhancement contentType-HTML Content fragmentId-1 payloadId-61603 alignment-right size-small"%%The last hope that retailers have of posting reasonable numbers for 2009 is gift cards. Mall of America is seeing gift card sales flat through this week compared with a year ago, according to a report from the AP. The news service points out that people redeeming gift cards often spend more than the amount on the cards.

It's safe to say that the 2009 holiday shopping season was a bad one, particularly if retailers are left looking to gift cards to save their sales numbers. Retailers may argue that 2009 was no worse than 2008, but 2008 was one of the most disastrous holiday seasons in memory. That sales this year are comparable to those from 2008 means the consumer economy probably hasn't improved at all and suggests that the first portion of 2010 won't not be much better.

Retailers may have managed their inventories better this year and hired fewer part-time employees. Those actions may improve their financial results slightly for the fourth quarter. But the really troubling news from the 2009 holiday shopping season is that it was bad enough to leave retailers looking toward 2010 as the year that they may be able to claim a real recovery from the recession.

Douglas A. McIntyre is an editor at 24/7 Wall St.

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