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Many merchants said Wednesday that with the uptick, sales plans for the quarter were now attainable and inventories were under control. But there was concern that margins suffered and that consumers will tighten up even more in 2008, increasing the angst that seems to pervade the industry.
"It's as if consumers feel they're doing something wrong if they spend money,'' said Lou Amendola, Brooks Brothers' chief merchandising officer. "They're almost afraid to spend. That's what concerns me — this guilt factor."
Presidential politics, the Iraq war, high gas prices, a volatile stock market and the housing slowdown are among the key economic factors that will continue to squeeze the apparel business and deter trips to the malls, experts said. Looking ahead, retailers are also worried about the early timing of Easter, which falls on March 23, compared with April 8 last year.
"Consumers are unsure of what 2008 is going to bring,'' said C. Britt Beemer, founder and chairman of America's Retail Group, a consumer research and marketing company.
Beemer characterized post-Christmas store traffic as on par with last year and believes consumers will wait longer to redeem gift cards. "They're just more frugal and cost-conscious," he said.
As far as the past holiday season, "There were a lot of consumers that just didn't get their Christmas shopping done," he said.
"Consumers flocked to stores to take advantage of post-Christmas sales and to begin redeeming gift cards, which was definitely a welcome sight for retailers," Bill Martin, co-founder of ShopperTrak, which monitors consumer traffic, said in a statement.
However, as one department store executive noted, "Whatever business retailers got came at a very high markdown rate."
Several executives noted that while gift cards made gains, they weren't as robust as last year.
Standard & Poor's Equity Research Services said retailers will post 3 to 3.5 percent holiday sales increases, though the range from other analyst and trade groups ranges from less than 3 percent to 4 percent.