Malls busy but not packed

Competition means lean times for some retailers

Many last-minute shoppers who were willing to brave tough holiday crowds and scramble for parking at Oahu's retail centers yesterday were either true optimists or procrastinators.

But no matter what descriptions fit them, there just weren't enough of them to bring a little extra Christmas cheer -- and cash -- to Oahu retailers.

What will people spend? According to a nationwide survey by the National Retail Federation, holiday shoppers are expected to spend 7 percent more this year than they did in 2005. The average shopper is expected to spend $791.10 this year on holiday merchandise, up from the $738.11 spent last year, according to the federation's 2006 Holiday Consumer Intentions and Actions survey. Furthermore, shoppers will take advantage of sales and discounts during the holiday season to spend an additional $99.22 on themselves. Source: International Council of Shopping Centers 2006

Though it was busy from Waikiki to Ward, Ala Moana and Pearl Center to the outlying shopping strip malls along the North Shore, Waianae, Waikele, Waipahu, Ewa and Kapolei -- it was possible to find parking just about anywhere -- a sure sign that Christmas Eve 2006 proved to be a chillier day on Oahu for retailers than it had been in a long time.

"It's much softer this year," said retail analyst Stephany Sofos as she surveyed the parking lot of Ala Moana Center and the traffic down Nimitz Highway from her seat at Longhi's restaurant.

"This is the oddest Christmas Eve that I've ever seen in the 25 years that I've been in this business," Sofos said. "Look, there aren't any cars in the parking lot or on the road."

To be sure, there were plenty of parking stalls on the upper decks of Ala Moana, but just below it was a madhouse. Holiday retail performance in Hawaii, like it was in most of the United States this year, was just as segmented.

While many retailers -- especially those carrying hot items like iPods -- reported bang-up sales, there were plenty of other "stores that were so quiet that you could drive a cannon through them," Sofos said.

The softer side of the holidays did not apply only to Oahu this year. The International Council of Shopping Centers, the 63,000-member global trade association of the shopping center industry, downgraded its earlier holiday forecast in early December.

"Though the 'traditional' kickoff to the holiday shopping season got under way over Thanksgiving weekend and provided some encouragement throughout the industry, November's softness must now be made up over the next month," said Michael Niemira, ICSC's chief economist and director of research.

With November results in hand and industry expectations of some lingering softness in some sectors, the ICSC has lowered its sales holiday outlook from a 3 percent November-December gain to 2.5 to 3 percent. The trade association also has lowered its expectations for the November-January holiday period from 3.5 percent to 3 to 3.5 percent. For December, industry chain-store sales are expected to increase by 2 to 3 percent on a year-over-year same-store basis.

In 2005 the ICSC reported that 23 percent of all holiday sales took place from Dec. 18 to 24. Judging from the ease of access to most stores on Oahu yesterday, 2006 is unlikely to echo those results.

"There aren't many people here," said Betty Jackson, an Ewa Beach resident who was out shopping for a game cartridge with her husband and two boys in the Sears store at Pearlridge mall.

Traffic was so slow that Jackson and her family decided to attempt another store when they could not find the item that they needed.

"I don't like rat races, so I usually don't shop on Christmas Eve, but this is really manageable," Jackson said.

The fear of procrastination by shoppers, who had an extra weekend shopping day this season, as well as the need to compete against 24/7 discount chains like Wal-Mart that are enjoying a particularly strong third quarter, caused some Hawaii retailers to jump-start the holiday shopping frenzy.

Traditionally, merchants and economists watch consumer traffic trends on the Friday after Thanksgiving -- dubbed Black Friday because it is the day retailers hope the year's finances will rise into the black. But each year, the countdown is starting earlier -- which might be one reason for the thinned-down crowd on Christmas Eve.

For Oahu and national retailers, though, the season is far from over. It will run clear into February.

"Holiday music sales started out really slow, but they've picked up considerably," said Shelley Coscina, vice president of marketing for Mountain Apple Co. "Traffic was really dead in November and early December, but it got much stronger."

The Sunday timing of Christmas Eve might have turned it into a retail anomaly, Sofos said.

"It's Sunday and there's a ballgame going on. ... Who knows? That could have made a difference," she said. "There are also a lot more choices for shoppers this year."

The ICSC estimates that Oahu is underretailed by as much as a million square feet, but it would appear from the turnout this season that at least in some locations consumers have too many choices, Sofos said.

"Some stores are really busy; others aren't getting any traffic," she said. "There's a lot of competition -- maybe too much."

Whatever the reason for the Christmas Eve slowdown, the turnout is likely to prove disappointing to Oahu's retailers, who had expected better results. Most retailers were expecting to record their highest sales the weekend before Christmas and the week after the holiday, said Carol Pregill, president of the Hawaii Retail Merchants Association.

Ali Rigg, 21, who was in the midst of doing about 75 percent of her holiday shopping yesterday, said that last-minute shopping comes with its own reward.

"It's my plan every year," said Rigg, who spent several hours at Pearlridge and Ala Moana. "I'm not necessarily looking for price bargains -- to me the real bargain of Christmas Eve is that stores don't seem as busy. I think it's worth the wait."

While Oahu retailers did not see a lot of procrastinators this year, it is a strong enough consumer sentiment that some, like Ala Moana Center, are actually trying to target them.

Ala Moana Center had seen traffic pick up during the week prior to Christmas and was expecting a high volume of shoppers the final three days before Christmas, said Sharon James, regional vice president of marketing for General Growth Properties.

"The 2006 holiday season is looking promising for Ala Moana Center with an expected strong single-digit sales increase for the center as a whole over 2005 figures," James said. "With key sales events occurring and a high volume of after Christmas gift card redemptions, we also are expecting a promising January in regard to retail sales for the center."

Just to hedge its performance, Ala Moana will offer extended holiday hours into January. The center will open from 8 a.m. to 9 p.m., 1 1/2 hours extra, tomorrow. It also will offer other expanded schedules through Jan. 1, its Fukubukuro holiday promotion.

"After Christmas, specials and sales are featured at a number of merchants center-wide, and people are still in the holiday mode of shopping -- so it's still a very busy period for Ala Moana Center," James said.