Retailers banking on last-minute shopping amid sluggish Christmas sales

A mid rising inflation and more costly imports, a concurrent increase in the price of goods is partly being blamed for a slowdown in retail sales just days before Christmas, but there’s optimism among business owners that sales might begin to pick up speed in the ‘last-minute rush’.

Christmas Eve, December 24, tends to be among the busiest shopping days for retailers.

In the high shopping season, consumers usually fork out more money to get the items on their Christmas wish list, as retailers cash in on the demand for fashion, household and small gift items, and food.

But this year the sales temperature is a little colder, forcing businesses to focus on bargains as enticement.

From as early as November, retail stores across various industries began wooing customers with heavy discount packages and promotional offers, in a bid to get sale numbers back up to pre-pandemic performance, and in some cases, above 2020 December sales.

The deals are running longer than usual, too. In fact, one department chain, Lee’s Fifth Avenue, up to Wednesday was looking to attract customers with the offer of a 20 per cent storewide discount.

The lines at the stores and ATMs this year are also noticeably shorter, suggesting that the demand for cash is not as robust this season. In fact, in its most recent release on currency in circulation, the Bank of Jamaica, BOJ, said that between December 1 and 17, the increase in the stock of currency was around 5.2 per cent, but that the figure fell below the 5.6 per cent expansion that had been forecast. It was also 2.4 percentage points below the 7.6 per cent expansion in cash in the similar period in 2020.

Year-to-date December 17, money in circulation grew by 18.3 per cent to $215 billion, but that was way below the 30.3 per cent expansion for the corresponding period in 2020.

Additionally, the real growth in currency was estimated at 10.2 per cent by the BOJ, when the higher cost of goods is factored in.

Businessman Gassan Azan, the owner of Bashco Trading Company and MegaMart Jamaica, on Wednesday told the Financial Gleaner that December sales were down three per cent at Bashco when compared to the similar period of 2020.

“We hope to see some improvement in the numbers over the next few days. What we are seeing is that people are picking up fewer items because prices have gone up, but the amount they are spending is more or less the same as last year,” he said.

“Additionally, there are a number of items in short supply, like glassware and plastic containers, which could also be affecting sales,” Azan added.

Bascho Trading, a seller of housewares and other items, has applied an average increase of 25 per cent on the price of its goods, while supermarket chain MegaMart has increased grocery prices by an average 15 per cent, he said.

Still, consumers are heading to the Azan-owned and operated stores.

“People are still coming to stores because even those the prices have gone up, the feedback we are getting from consumers is that some goods are priced 25 to 50 per cent cheaper in our stores when compared to others,” Azan said.

“And so we expect sales to improve in the Christmas rush shopping, and even leading up to the new year celebration,” he added.

Azan was one of a few retailers willing to speak with the Financial Gleaner on sale trends for the festive season. Other stores, such as Maxie Department Store, chose not to comment for this story, while Singer Jamaica and Progressive Grocers requested more time to provide up-to-date sales numbers.

Despite a fallout in business across sectors last year due to the COVID-19 pandemic, both Bascho and MegaMart were said to have surpassed 2019 revenue performance at the end of 2020. Azan also hopes to exceed 2020’s performance.

But there are other businesses still trying to get back to their pre-pandemic performance.

Ammar’s Department Store saw its crumble with the outbreak of COVID-19 last year. But in addition to discounts and promotions for the festive season, Ammar’s director Michael Ammar Jr has taken a more strategic approach to get repeat sales into the new year by refreshing of some of the styles and brands the chain carries.

In the midst of 2020, when talks were swirling that brick-and-mortar stores would see declining traffic in stores as time passes, Ammar’s pressed on with its plan to invest $90 million in the renovation of three stores, and also added an online component.

The decisions taken by the company over the past 18 months are paying off, Ammar noted, saying sales this year have been climbing. But up to Wednesday, the company’s sales numbers were still lagging behind its 2019 performance.

“2020 was really not a good year for us, and so had we not taken those tough decision, we probably wouldn’t be here talking now. I’m happy to say that sales have been trending up. It’s not back to 2019 levels, but we are not very far from where we were pre-COVID,” Ammar said.

karena.bennett@gleanerjm.com