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American Morning

Sales Slump

Aired December 24, 2002 - 07:04   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


PAULA ZAHN, CNN ANCHOR: Christmas shopping season is heading into its final hours, and some retailers say this could be the worst holiday season in a decade.
Kathleen Hays is standing by on Fifth Avenue here in New York City, as shoppers go down to the wires. They'd have to be early birds to be out there this morning at this hour of the morning.

Good morning -- Kathleen. Merry Christmas.

KATHLEEN HAYS, CNN CORRESPONDENT: Merry Christmas to you too, Paula. And, of course, we've seen people out here this morning, and they are not done (ph) with their shopping yet, but we have asked them if they're finished. A couple of people said yes. Some people said, no, actually, I have a few presents left to buy. So, the clock is definitely ticking.

As you've just mentioned, so far a disappointing season. In fact, some people are saying it may be the worst holiday shopping season since the '70s.

Now, sales right now seem pretty slim, up 1.5 to 2.5 percent. Actually one of the big New York investment houses (UNINTELLIGIBLE) has its own retail index, they say it may be up only a half percent. So, slim indeed.

Deep discounts, great for shoppers, things are slashed and slashed again. However, it hurts the retailers themselves. It cuts their profit margin. And remember, a lot of the retailers get 25, 50, even 60 percent of all of the year's profits in this one last couple of months of the year.

But there is maybe some hope. About 10 percent of Americans do a lot of their shopping after Christmas. They wait and take advantage of even the bigger sales. So, that will help some more. But again, the more you have to discount to increase the volume, the less you add to your revenues and your profits.

So, you know, maybe we shouldn't feel too bad for the retailers. It's a tough time. People are worried about war. They're worried about their jobs. Energy prices are rising. That's going to boost their fuel bills and take money away from other kinds of shopping. So, maybe in an environment like that, retailers will be happy if they even do eke out those small, small gains -- Paula.

ZAHN: Kathleen, a personal question for you. Are you done yet, shopping that is? HAYS: You know, I am so much almost done, because it's my classic self (ph), I always wait until the end, and part of the reason is, it's the final hours, Paula, I find I can't think anymore. It's like it's there, buy it and wrap it. It's a present, people will love it. So, I'm pretty much almost done, though.

ZAHN: Good.

HAYS: I'm glad I'm down here. I've got a little more to do. How about you?

ZAHN: I haven't even started. It's kind of hard to shop on crutches in New York City in these crowds.

HAYS: Well, you know...

ZAHN: So, I've decided to stay safe, and I've done a little bit of stuff on the Internet, and...

HAYS: Give us a ring. If there's anything we can pick up out for you...

(CROSSTALK)

ZAHN: ... I've got so many things for you.

HAYS: OK.

ZAHN: Kathleen, great, have a great holiday.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.






Aired December 24, 2002 - 07:04   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PAULA ZAHN, CNN ANCHOR: Christmas shopping season is heading into its final hours, and some retailers say this could be the worst holiday season in a decade.
Kathleen Hays is standing by on Fifth Avenue here in New York City, as shoppers go down to the wires. They'd have to be early birds to be out there this morning at this hour of the morning.

Good morning -- Kathleen. Merry Christmas.

KATHLEEN HAYS, CNN CORRESPONDENT: Merry Christmas to you too, Paula. And, of course, we've seen people out here this morning, and they are not done (ph) with their shopping yet, but we have asked them if they're finished. A couple of people said yes. Some people said, no, actually, I have a few presents left to buy. So, the clock is definitely ticking.

As you've just mentioned, so far a disappointing season. In fact, some people are saying it may be the worst holiday shopping season since the '70s.

Now, sales right now seem pretty slim, up 1.5 to 2.5 percent. Actually one of the big New York investment houses (UNINTELLIGIBLE) has its own retail index, they say it may be up only a half percent. So, slim indeed.

Deep discounts, great for shoppers, things are slashed and slashed again. However, it hurts the retailers themselves. It cuts their profit margin. And remember, a lot of the retailers get 25, 50, even 60 percent of all of the year's profits in this one last couple of months of the year.

But there is maybe some hope. About 10 percent of Americans do a lot of their shopping after Christmas. They wait and take advantage of even the bigger sales. So, that will help some more. But again, the more you have to discount to increase the volume, the less you add to your revenues and your profits.

So, you know, maybe we shouldn't feel too bad for the retailers. It's a tough time. People are worried about war. They're worried about their jobs. Energy prices are rising. That's going to boost their fuel bills and take money away from other kinds of shopping. So, maybe in an environment like that, retailers will be happy if they even do eke out those small, small gains -- Paula.

ZAHN: Kathleen, a personal question for you. Are you done yet, shopping that is? HAYS: You know, I am so much almost done, because it's my classic self (ph), I always wait until the end, and part of the reason is, it's the final hours, Paula, I find I can't think anymore. It's like it's there, buy it and wrap it. It's a present, people will love it. So, I'm pretty much almost done, though.

ZAHN: Good.

HAYS: I'm glad I'm down here. I've got a little more to do. How about you?

ZAHN: I haven't even started. It's kind of hard to shop on crutches in New York City in these crowds.

HAYS: Well, you know...

ZAHN: So, I've decided to stay safe, and I've done a little bit of stuff on the Internet, and...

HAYS: Give us a ring. If there's anything we can pick up out for you...

(CROSSTALK)

ZAHN: ... I've got so many things for you.

HAYS: OK.

ZAHN: Kathleen, great, have a great holiday.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.