RETAILERS SLASH PRICES TO BOOST BOTTOM LINE.

Byline: Rachel Beck Associated Press 

Even with crowds jamming into stores the days after Christmas, there is still uncertainty over whether this holiday season will shape up to be as strong as many retailers had anticipated.

Merchants said Monday that the weekend's buying frenzy lifted sales, but few expected the post-holiday rush to make up for a disappointing season.

Especially troubled were department stores, which used big bargains to entice shoppers before and after Christmas but still failed to get the sales they needed to boost the bottom line.

``They just didn't get as many items sold per customer this year as opposed to last year,'' said Britt Beemer, who runs the consulting firm America's Research Group in Charleston, S.C.

That's a big letdown for those counting on a surge after Christmas to offset what's been a tough holiday season. Last year, big post-Christmas gains boosted sales to respectable levels.

While most merchants won't release their holiday sales until Jan. 7, there were early signs that some fell short of expectations.

Lehman Brothers retail analyst Jeffrey Feiner reported Monday that sales at Sears, Roebuck & Co.; J.C. Penney; May Department Stores (which includes Lord & Taylor and Hecht's); and Saks, the former Proffitt's chain, were tracking below their holiday plans.

The only retailers that showed great strength were the discount chains, like Wal-Mart and Target, and a number of specialty stores, including Gap and Ann Taylor.

Many analysts now predict holiday sales overall will be up about 2 percent to 3 percent from a year ago, short of their estimates of 4 percent to 5 percent made at the start of the season.

``Those original expectations - forget about those. We won't even come close,'' said Kurt Barnard, a retail consultant and president of Barnard's Retail Trend Report in Upper Montclair, N.J. ``If it hadn't been for the strength of the discount stores, this season would have been a disaster.''

Even with sharp gains on the stock market and a strong economy, shoppers didn't spend freely this Christmas. They were choosy about where they shopped and how much they were willing to spend.

Also troublesome was unusually warm weather for most of the season, which tempered demand for all winter merchandise, from coats to snow shovels.

While sales via the Internet are still only a fraction of store sales, some retailers began losing business to online merchants. Internet sales during holidays more than tripled from a year ago and may top out at $13 billion for the entire year, according to a report released Monday by the Boston Consulting Group and shop.org, an association of online merchants.

To clear store shelves, many retailers were forced to resort to aggressive discounting - some even slashing prices well before Christmas. That pleased consumers but will likely hurt profit margins.

CAPTION(S):

Photo

PHOTO (Color) Shopper Tessia Reed leaves a mall in South Carolina where retailers slashed prices.

Tracy Glantz/Associated Press