Shopping at BJ's

Barbara and Gregory Biniasz of Perry Hall shop at BJ's in White Marsh. This year, they have a new grandchild, so it's the first time they're shopping for him. (Photo by Donna Griffin, Special to SunSpot / November 24, 2003)

With the holiday shopping season already under way, many of the nation's leading retailers say they plan to avoid the kind of deep, across-the-board discounts that gave last year's season an air of desperation -- and crimped profits.

Instead, many are using more subtle, under-the-radar promotions to lure shoppers this year.

Several big chains, including Federated Department Stores Inc. and Limited Brands Inc.'s Express division, are cutting back on the number of blockbuster discount events that they've relied on in past years to pack their stores.

Even Foot Locker Inc., whose buy-one-get-one-free deal helped spark a frenzy of similar activity among rivals last year, insists it's changing course.

"We think that particular promotion for our store has gotten a bit stale," said Peter Brown, a spokesman for the New York-based chain.

Wall Street likes the new discipline.

"The trend has been to rein in harmful promotions," said Todd Slater, an analyst with Lazard in New York. This year, he said, "retailers may be prepared to leave some pockets of business on the table, which is healthy."

Better outlook

Retailers can't afford to reprise last year's disappointing holiday season, when sales of apparel, toys, electronics and other gifts rose by a modest 2.2 percent, according to the National Retail Federation in Washington. Early warning signals abounded last year: Sales actually slowed heading into the holiday season, prompting many merchants to rev up the promotional machine in earnest.

John Morris, an analyst at Harris Nesbitt Gerard who has been tallying holiday discounts for several years, said the number and severity of markdowns increased 10 percent in 2002, on top of a 15 percent rise in 2001.

This year, thanks in part to a healthier economy, retail sales are accelerating as the holidays near. And despite the better outlook, stores generally have refused to stock up on extra inventory, which means they have the luxury of being more measured in their discounting strategies.

"It is going to be a less-promotional holiday selling season," Morris said.

Still, even while they are avoiding undignified 50 percent-off signs, some retailers are encouraging their best customers to come in early with special, targeted discounts.

"I think people are tired of the all-day sale," said JoAnn Brosi, general manager for the Glendale Galleria, a mall in California. "When they're on a mailing list and they're asked to be part of a small promotion, it makes them feel special."

Invitation-only sales

Sharon Chortek, a Dallas-based TV producer, has a stack of special pre-holiday promotions she's received in the mail over the past three weeks. Each come-on has a little different twist.

One, from The Galleria -- a top-tier Texas mall anchored by Saks Fifth Avenue, Nordstrom and Macy's -- offers a $25 to $50 gift check to any number of Galleria specialty stores, including Williams-Sonoma, Coach and Cartier.

To qualify, shoppers need to spend $200 at the mall. The promotion, which began Nov. 7, runs until supplies last -- a "big incentive to get there early," Chortek said.

Last week, Chortek was invited to the special three-hour sale at Neiman Marcus called Private Night, offering 25 percent to 40 percent off on such merchandise and products as Burberry, which rarely go on sale.