Paving the way for a surge in gift card redemptions, Wal-Mart Stores is giving procrastinators plenty of reason to wait until after Christmas. The Bentonville, Ark.-based retailer announced a series of price cuts set to start Dec. 26, including a $50 gift card with an Xbox 360 purchase, an eMachine netbook for $228 and up to 50% off on hundreds of toys, which the retailer has been aggressively marking down since before Thanksgiving. The chain is also extending many of its pre-Christmas prices, including Blu-ray movies for under $20.
That idea, it says, is to create plenty of motivational bargains for those storming the store with gift cards. Wal-Mart says 55% of moms who shop its stores say they like to receive gift cards over the holidays, specifically because it allows them to pounce on post-holiday deals. And two out of five say they plan to redeem their gift cards right after Christmas, believing they will find the best prices.
Other retailers began even more aggressive price cuts even before the holiday: The Home Depot, for example, has been advertising a 50% cut on all holiday decorations.
Both moves come as experts observe dishearteningly soft sales in the final days of the holiday season. The latest data from ShopperTrak says that total retail sales for the last Saturday before Christmas -- when much of the East Coast was watching mountains of snow fall -- dropped a sharp 12.6%, while total U.S. foot traffic fell 12.4%.
The Chicago-based retail data analysis firm says that overall, "Super Saturday" sales accounted for just $6.9 billion, as opposed to $7.9 billion last year and $8.7 billion in 2007. And while the declines were steepest in snow-slammed regions -- falling 17.3% in the Northeast, 14.6% in the South and 10.1% in the Midwest -- even the West showed declines, with sales slipping 7.1%.
"Mother Nature was very unkind to retailers on Saturday as the year-over-year sales decline was the largest we've seen since we began reporting this number in 2002," the company says in its report. "We originally predicted Super Saturday would be the number two sales day of the season just behind Black Friday, with the full weekend landing just ahead of Black Friday weekend as the top performing period. But after analyzing our data following the storm, it's fairly apparent neither will be the case."
The firm says it is still too soon to tell what impact the decline will have on the full holiday season.