Hawaii retailers had a Merry Christmas

HAWAII'S retail sales this holiday season were generally good, though major malls here won't have data to compare to last year until later this month.

Nationwide numbers released yesterday showed that merchants, trotting out deep discounts before Christmas, lured enough last-minute buyers to deliver a decent, if unspectacular, sales gain of 3.2 percent in December.

"We did a spot-survey ... of some retailers Dec. 27 to get a feel of how they did. For the most part, they were up," said Kim Person, marketing manager for Windward Mall. Of the eight retailers in different categories, five reported sales over last year, while sales at the three others were down.

"Some were up tremendously," she said, citing Koolau Pets, which reported a 35 percent sales increase. The longtime tenant expanded its store and brought in high-end, unusual merchandise, such as pet strollers that sold for $120. They sold out, she said. With expanded square footage, the increase in sales is not a traditional apples-to-apples comparison, but it is dramatic nevertheless.

This was the first Hawaii Christmas for lifetime retailer Fred Paine, general manager of Pearlridge Center. Many merchants have told him informally that sales were up significantly over last year.

"I would say Hawaii is probably beyond the rest of the country. I've never seen a shopping season like this before," he said.

In Maryland, where Paine previously worked, he said "there were actually shopping groups that would take buses from Baltimore to Reading, Penn., where all the outlets were."

In Hawaii, though, the difference to Paine was "the intensity ... and people here just don't have the choices that they do on the mainland."

There are families who hit several hot shopping spots on "black Friday," the day after Thanksgiving, but on the mainland, it is not uncommon for shoppers to travel to five or six centers within a 60- to 70-mile radius, Paine said.

The nationwide numbers from the International Council of Shopping Centers showed that retailers that waited until closer to Christmas to flood shoppers with ads and markdowns -- like Target -- had the strongest December.

Chains like Wal-Mart that focused on getting a jump-start on holiday sales before Thanksgiving fell behind last month.

Wal-Mart, in particular, "had a competitive advantage in November which they suddenly lost in December, when other companies stepped up," said Bill Dreher, a retail analyst at Deutsche Bank Securities.

Wal-Mart's sales at stores open at least a year rose a meager 2.2 percent. Because of its size -- 10 percent of retail purchases are made there -- its performance dragged down the entire industry.

Consumers spent $93.2 billion at the nation's retailers in December, up from $90.3 billion a year ago. The 3.2 percent increase beat last year's 2.7 percent gain for December, but fell below a 4.3 percent rise in 2003.

"Not bad, kind of average," was the verdict from John D. Morris, a retail analyst at Harris Nesbitt.

But marketing tactics did not tell the whole story. With home heating costs rising, retailers that cater to lower- and middle-income shoppers, like Kohl's and Sears, turned in largely disappointing results. But higher-end chains, like Neiman Marcus and Nordstrom, whose shoppers are more insulated from energy prices, once again thrived.

A complete picture of the holiday season will not emerge until the end of January after millions of Americans redeem gift cards and retailers can register them as sales.

What is more, monthly same-store sales, as they are called in the industry, do not factor in online sales. Web sales rose 25 percent this holiday, to $18.1 billion through Christmas, according to ComScore Networks.

Wal-Mart's performance struck Wall Street as particularly sluggish, given the chain's considerable holiday marketing campaign, which included television commercials with Garth Brooks, $400 laptops and a pledge to match competitors' "doorbuster" prices on the day after Thanksgiving.

Analysts said Wal-Mart's early advertising blitz, which tapered off in December, left it vulnerable to competition in the final weeks of the season. Unrelenting negative publicity from union-backed groups like Wake Up Wal-Mart, which organized holiday protests in front of its stores, may have also hurt the chain.

"The 2004 holiday season revealed that Wal-Mart was no longer invincible," said Bernard Sosnick, an analyst at Oppenheimer & Co. "The 2005 holiday season did not erase that."