The economic expansion is being fueled by gains in manufacturing and business investment that reflect growing demand from overseas and efforts to rebuild inventories. Americans, shaken by the loss of 8.4 million jobs during the recession, will probably be slow to regain the confidence needed to spearhead the next phase of the recovery.

“The good news is that consumers are still spending even though they are worried,” said Nariman Behravesh, chief economist at IHS Global Insight in Lexington, Massachusetts, who projected the rebound in sales and setback in confidence. “Spending is decent enough to provide a foundation for growth. For now, this is going to be a business-led recovery.”

Stocks fell today after China unexpectedly increased bank reserve requirements for a second time in a month to cool the worlds fastest growing major economy. The Standard & Poors 500 Index dropped 0.3 percent to 1,074.92 at 12:43 p.m. in New York. Treasuries climbed, pushing the yield on the benchmark 10-year note down to 3.68 percent from 3.72 percent late yesterday.

Stockpiles Drop

A third report today showed inventories at U.S. businesses unexpectedly fell in December for the first time in three months as companies couldnt keep up with increasing demand. Macys Inc. and Gap Inc. are among retailers driving profits up by keeping stockpiles lean after the biggest household spending slump in three decades.

Retail sales were projected to rise 0.3 percent, according to the median estimate of 82 economists in a separate Bloomberg survey. Forecasts ranged from a decline of 1 percent to a 0.7 percent gain. The Commerce Department also revised the December decrease in purchases to 0.1 percent from 0.3 percent.

Purchases excluding autos climbed 0.6 percent, also exceeding the survey median, which called for 0.5 percent gain.

“Consumers showed continued improvement,” said John Herrmann, chief economist at Herrmann Forecasting in Summit, New Jersey. “Consumers are still relatively cautious, spending what theyre making and not taking on debt.”

Broad-based Gains

Nine of 13 major categories showed gains in sales last month, led by general merchandise stores, grocery stores and non-store retailers.

Amazon.com Inc. reported Jan. 28 that its fourth-quarter profit and sales beat analysts estimates as shoppers took advantage of holiday discounts and free shipping.

Sales at 31 chains rose 3 percent last month, the International Council of Shopping Centers said Feb. 4, beating its forecast of a 1 percent gain. Lower inventories helped stores reduce markdowns, which boosted sales volume and profit margins, said Mike Niemira, the ICSCs chief economist.

Macys, the second-largest U.S. department-store company, last week said sales at stores open at least a year gained 3.4 percent in January, helped by online purchasing. The Cincinnati- based retailer said fourth-quarter profit exceeded its forecast.

Less Fear

“Were not seeing the fear factor we saw last year,” retail analyst Dana Telsey, founder of Telsey Advisory Group in New York, said in an interview on Bloomberg Radio.

The consumer sentiment index was forecast to rise to 75, according to the median of 74 economists surveyed by Bloomberg News. The measure averaged 88.9 during the expansion that ended December 2007.

Todays report showed the measure of current conditions, which reflects Americans perceptions of their own finances and whether its a good time to buy big-ticket items such as cars and homes, rose to 84.1 this month from 81.1 in January.

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Hit products such as the +J line overseen by German designer Jil Sander led to a 40 percent surge in first-quarter sales, defying a slump in Japanese household spending amid job losses and falling wages. Chief Executive Officer Tadashi Yanai, Japans richest man, is expanding Uniqlo overseas with store openings in Europe, the U.S. and Asia.

“No one can follow Fast Retailing,” Yasuhiro Matsumoto, a senior analyst at Shinsei Securities Co. in Tokyo. “Uniqlo clothes are fashionable and attractive so they dont bore customers.”

The retailer, which competes with Inditex SAs Zara and Hennes & Mauritz ABs H&M brands, raised its full-year sales forecast to 820 billion yen from an earlier estimate of 798 billion yen.

Japan Sales

Fast Retailing raised its full-year forecast for its Uniqlos same-store sales in Japan to a 6.2 percent increase from 3 percent.

Fast Retailing doubled Asian stores outside Japan last quarter, opening 11 stores in China and 13 in South Korea. The +J brand also helped boost Uniqlo sales in the U.K., the company said.

Fast Retailing rose 1.4 percent to 16,900 yen at the 3 p.m. close on the Tokyo Stock Exchange before the company released earnings. The stock rose 35 percent last year, outperforming a 19 percent increase in the benchmark Nikkei 225 Stock Average. Fast Retailing surged 63 percent in 2008.

First-quarter net income increased 57 percent to 34.9 billion yen, with sales of 263.5 billion yen from 188.5 billion yen a year earlier.

Domestic sales at Uniqlo stores open at least a year surged more than 30 percent in September and October and gained 7.9 percent in November. The company had 770 directly operated stores in Japan at the end of last month.

The companys performance contrasts with other Japanese retailers. Seven & I Holdings Co., operator of the 7-Eleven convenience-store chain, and Aeon Co., the biggest-supermarket operator, both posted declines in nine-month revenue yesterday.

Japan Recession

Salaries have dropped for 18 straight months and the nations retail sales are down for the last 15 months as Japan emerges from its worst postwar recession.

The retailer last year said it aims to boost sales to 5 trillion yen by 2020, with China, the U.S. and Europe, and Asia excluding Japan and China, each accounting for 1 trillion yen of revenue.

Based in Yamaguchi, western Japan, the company also owns brands including Princesse tam.tam, Theory and Comptoir Des Cotonniers, Zazie and Enracine.

In October, Fast Retailing opened a store in Paris across the road from the Galeries Lafayette department store. It also expanded its outlet in Tokyos Ginza shopping district by 50 percent.

Yanai, who has said hes prepared to spend as much as 400 billion yen on acquisitions, was outbid by Dubai investment firm Istithmar PJSC for Jones Apparel Group Inc.s Barneys New York chain in 2007. Yanai is Fast Retailings biggest shareholder with a 27 percent stake and he and his family were worth $6 billion last year, according to Forbes.

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“They all did execute pretty well in response to the slowing consumer,” said David Abella, a portfolio manager with Rochdale Investment Management LLC in New York who holds shares of Aeropostale and Nordstrom. “If retail sales pick up broadly, they should get outsized gains at the expense of competitors.”

Teen retailer Aeropostale boosted sales by offering $10 hooded sweatshirts for two hours on Black Friday, the biggest shopping day of the year. By contrast, Abercrombie & Fitch Co.s main holiday promotion was a $25 gift card on $100 in purchases, more than customers were willing to spend, said Thomas Weisels Dunn. Nordstrom made fewer cuts to inventory to capture more revenue than Saks Inc., the luxury retailer that reported a 26 percent drop in November same-store sales.

Consumer confidence improved for a second month in December, from a record low in February after unemployment and cratering home values led to a freeze in spending. Retailers sales may increase as much as 3.5 percent next year, the International Council of Shopping Centers forecast yesterday.

Balancing Act

Aeropostales sales for the day of the sweatshirt promotion and the following Saturday rose 10 percent from a year earlier at comparable stores and gross margins, a measure of profitability, also increased, the New York-based company said.

“Our success this year has come from focusing on the right gift items and balancing fashion and value,” President Mindy Meads, 57, who will become co-chief executive officer next month, said in a telephone interview.

Abercrombie & Fitchs gift-card offer, which started Nov. 24, is the promotion on which Abercrombie has focused the most, said Eric Cerny, a spokesman for the New Albany, Ohio-based company. He declined to comment on its results.

Aeropostale, Nordstrom and Kohls sell basic clothes like sweaters, coats, boots and pajamas that have topped consumers gift lists in the economic slowdown, according to retail analysts. Shoppers planned to purchase those items because they are practical, according to a survey conducted last month by the ICSC, a New York-based trade group.

“They are rewriting the playbook a bit,” Dunn at Thomas Weisel said. “The emphasis on value is certainly something new and something we have not seen in the last 10 years.”

No Leftovers

While retailers focused on promotions, they also reduced inventory to avoid the markdowns of as much as 80 percent they had to make on leftover merchandise last year. Saks may have cut too deeply and missed out on sales, said Craig Johnson, president of New Canaan, Connecticut-based consulting firm Customer Growth Partners LLC.

“Nordstrom is doing better because they cut inventory back just a little bit,” Johnson said. “They are not taking a meat cleaver to it.”

Trimming Inventory

Nordstroms inventory fell 6.7 percent as of Oct. 31, compared with a 21 percent drop at Saks. Nordstrom may also report an increase in fourth-quarter gross margin, Barbara Wyckoff, an analyst at Jesup & Lamont in New York, said in a Dec. 18 note. She recommends buying Nordstrom shares.

“Weve been encouraged by our sales results,” said Colin Johnson, a spokesman at Seattle-based Nordstrom.

Saks is comfortable with its inventory levels, said Julia Bentley, a spokeswoman. The cuts helped the company post a profit in the third quarter, compared with a year-earlier loss.

The 30-member Standard & Poors 500 Retailing Index has gained 50 percent this year as improving consumer sentiment helped chains. Nordstroms stock almost tripled, outpacing Sakss 58 percent rise this year. Aeropostale more than doubled, compared with Abercrombie & Fitchs 54 percent gain. Kohls, based in Menomonee Falls, Wisconsin, increased 53 percent.

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Thats good news for their bottom lines. But it means slim pickings for shoppers hoping for after-Christmas clearance sales. Shoppers looking for big sales should act quickly because there are relatively few leftovers to clear out.

“Retailers are much more nimble this year,” NPD analyst Marshal Cohen said. “Their Plan B is to have new receipts at the ready.”

Cohen said he noticed J. Crew and Coach were two that had restocked shelves with new items last week.

Because their ordering was in line with weak demand, retailers were able to sell more items at higher prices, which is critical to profits. Last year, profits were hammered by fire-sale discounts to get rid of the excess.

“The latest holiday shopping season wasnt a rip-roaring success, but at least it met or slightly exceeded expectations,” said John Lonski, chief economist of Moodys Capital Markets Research Group. “Consumer spending is indeed in a recovery mode, which brightens prospects for 2010.”

Spending rose 3.6 percent from Nov. 1 through Dec. 24 compared with the same period last year, according to MasterCard Advisors SpendingPulse, which estimates all forms of payment including cash. Adjusted for an extra shopping day between Thanksgiving and Christmas, the number was closer to a 1 percent rise. That was still better than the flat sales analysts had predicted.

Some retail stocks rose on Monday. American Eagle Outfitters shares rose 48 cents, or 3 percent, to $16.80. Macys Inc. shares rose 19 cents to $17.76. J.C. Penney shares rose 36 cents to $27.38.

Amazon.com Inc.s shares rose 84 cents to $139.31, buoyed by SpendingPulse numbers that showed online sales rose 15.5 percent.

The Dow Jones U.S. Retail Index edged up less than 1 percent.

After-Christmas traffic also appeared to be relatively robust, though it wasnt clear how much people were actually spending.

Roth Capital Partners analyst Elizabeth Pierce visited six malls Saturday in southern California and saw many shoppers without bags. Its likely shoppers who went looking for bargains left without buying much, she said.

Bessie Lyles of Huntsville, Ala., arrived at Lenox Square Mall in Atlanta at 6 a.m. to hunt for deals. The 57-year-old left Macys with two tops, sweaters and two pairs of jeans, including one pair for $4, marked down from $34.

In order to entice shoppers like Lyles through the rest of the week and into January, retailers are expected to steeply discount what leftovers they do have.

After last years dismal season, when unplanned discounts 70 percent off or more began appearing well before Christmas, retailers vowed they wouldnt get caught that way again.

This year the tight control let retailers mostly keep discounts planned, said FBR Capital Markets analyst Adrienne Tennant.

NPDs Cohen said the season was good enough for most retailers to survive, though many could shutter underperforming stores.

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Retail sales rose 3.6 percent from Nov. 1 through Dec. 24, compared with a 2.3 percent drop in the year-ago period, according to figures from MasterCard Advisors SpendingPulse, which track all forms of payment, including cash.

Adjusting for an extra shopping day between Thanksgiving and Christmas, the number was closer to a 1 percent gain.

Last year, the economy was in “critical condition,” said Michael McNamara, vice president at MasterCard Advisors SpendingPulse. “This year, its in stable condition.”

A major winter storm that slammed the Northeast and shut in shoppers on the Saturday before Christmas derailed sales. But consumers appeared to have made up for the loss by shopping in advance of the storm and the days leading up to Christmas.

“We had a pretty decent surge,” McNamara said.

Online sales were a particular hot spot, fueled by a big increase the weekend before Christmas. They rose 15.5 percent on the season, though they make up less than 10 percent of all retail sales.

One worrisome sign: Merchants are facing big hurdles to lure shoppers back in January amid lean inventories and what appear to be weak gift card sales. Gift card sales are recorded only when they are redeemed.

Stores count on a post-Christmas boost because of the growing importance of January on the retail sales calendar. Last year, the week after Christmas accounted for 15 percent of overall holiday sales, according to ShopperTrak, a research firm.

Retail consultant Burt P. Flickinger describes gift cards as “the lifeblood” of the post-Christmas season, because shoppers typically spend more than the value of the cards.

“Retailers with a disappointing December are going to need January to survive,” Flickinger said. “Inventories are even too low for retailers.”

Karen MacDonald, a spokeswoman at Taubman Centers Inc., said a survey among its centers this past weekend showed that merchants are on track to generate on average low single-digit sales increases from a year ago, though they still have a week to go.

Gift card redemption rates have been discouraging this weekend, she said. They averaged 10 percent, based on a sampling of malls, she said. In good years, those rates are anywhere from 30 to 40 percent. That confirms that gift card sales were just “lukewarm,” she said.

“Shoppers are seeing more value in deeply discounted merchandise” than buying gift cards, MacDonald said.

Ricki Smith, 30, of Prairie Village, Kan., had no returns and was hunting for bargains Saturday at the local Walmart store.

“Today, I bought mostly clearance stuff, stuff that got marked down to half-price, ” she said. She added that there were a lot of leftover bath sets, which were mostly what she bought. “The Christmas area, the actual decorations, it was pretty picked over,” she said.

Among the hottest sectors this shopping season, according to SpendingPulse:

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Retailers avoided last years pre-Christmas discounting by cutting inventory to “much healthier” levels, according to Morgan Stanley analysts. Prices, which were slashed by as much as 75 percent in 2008, were down by about 50 percent on Londons Oxford Street shopping district on Dec. 26 at retailers including Inditex SAs Zara clothing chain, House of Fraser Ltd. and billionaire Philip Greens Bhs and Topshop clothing outlets.

“Last year a lot of stores were offering huge discounts on a bulk of products,” Andrew Parkinson, general manager of the Bluewater shopping center in Kent, southern England, said by phone. “Were not seeing that this year.”

Marks & Spencer Group Plc, the U.K.s largest clothing retailer, began offering discounts of as much as 50 percent in its stores on Dec. 27. Last year the company had several pre- Christmas clearance days starting in November to shift unwanted stock.

An Added Boost

The New West End Co., the organization that represents retailers in central Londons main shopping district, expects consumers will have spent 120 million pounds over the Christmas weekend.

“The sales will give retailers an added boost following a positive Christmas period, which saw stores trading around 10 to 12 percent up on last year,” spokesman Jace Tyrrell said.

Tony Graham, a 19-year-old student standing outside the HMV Group Plc music store on Oxford Street said he used his Christmas voucher to buy a Microsoft Corp. Xbox 360, slashed from 69.99 pounds to 30 pounds.

“Im totally happy my parents gave me a voucher so I was forced to wait until the sales,” he said. “They might not be as good as last year but its still worth waiting for.”

The strength in Christmas trading isnt expected to continue in 2010, according to analysts, who said potential public spending cuts, tax increases and rising unemployment will weigh on consumer confidence next year.

Concerns for 2010

Market researcher Euromonitor forecasts overall U.K. retail revenue will rise by 2.5 percent to 332 billion pounds next year.

“Its not a massive increase and, in term of recent growth, its much down,” said Jon Wright, retailing manager at Euromonitor. “2009 was definitely better than most people expected. For 2010 its the macro-economic conditions that really concern us.”

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Kingfisher, Europes largest home-improvement chain, is offering 50 percent discounts today on bathrooms and kitchen doors at its B&Q chain while DSG International Plc, owner of the Currys electronics stores and PC World, advertised Beat the VAT increase! on posters and reduced a Sharp Corp. 32-inch flat- screen television to 299 pounds ($477) from 599 pounds.

“Encouraging customers to buy before the VAT increase is a great way for retailers to get money in before Jan. 1,” said Jon Wright, the retailing manager at Euromonitor, a London-based market research firm. “The clearance sales will be the biggest sales driver for shoppers, but the VAT will help that.”

Purchasers of higher-priced items such as kitchens, bathrooms and electrical goods should be the biggest winners in the sales, Wright said. Todays Boxing Day holiday may be the biggest shopping day of the year, according to Experian Group Ltd. research, as it falls on a Saturday, typically the peak day for retail revenue. Britons are increasingly prepared to shop over the festive period, the firm said.

Laptop Bargains

In Londons West End, Simon Mustafa, 34, was browsing the laptops at the Currys store in Oxford street. “Ive been planning this purchase since well before Christmas, he said. “Its worth waiting for the sale and Im getting an extra saving by missing the VAT.”

Online retail traffic also is likely to spike today, according to Interactive Media in Retail Group, a trade organization.

“Shoppers use it to search for bargains, as a price comparison site, and there is an awful lot of shopping as Britons cash in their vouchers on new iPhones and electricals,” David J. Smith, director of operations at IMRG, said by phone. “Amazon are having a very good period online, as well as John Lewis and Marks & Spencer.”

IMRG forecasts online sales in December will climb to 5 billion pounds ($8 billion), compared with 4.6 billion in 2008.

Online Discounts

Retailers began offering discounts online before the Christmas period this year. John Lewis Partnership Plc, the owner of department stores and Waitrose supermarkets, started its 50 percent Christmas discounting at 6 p.m. on Dec. 24, while the stores begin those discounts Dec. 27. Tesco Plc, the U.K.s largest retailer, started Web-based promotions for its non-food products such as pillows, sofas and toys on Dec. 22.

At the Oxford Street outlet of the clothing chain Next Plc, 22-year-old Ana Cabrita said shed been queuing for more than 15 minutes to snap up bargains on winter coats and workwear.

“They always have great sales here,” she said. “My friends got here at 6 a.m. and there were already people waiting. Its worth it for the bargains.”

Trevor Pereira, commercial director at Capital Shopping Centres Plc, the owner of 14 regional malls including Lakeside in southeast England and Braehead in Scotland, said customers had been “flooding in” for laptops, televisions, mobile phones and homewares.

Extremely Busy

“Shoppers have been planning their sale purchases before the VAT hike comes into effect, and as a consequence we are extremely busy,” he said.

Snowy condition across the U.K. deterred shoppers before Christmas, with retail visits down 7 percent in the week ended Dec. 13 from a year earlier, the market research firm Synovate said. London and the Southeast recorded the lowest levels.

“Droves of people were simply put off venturing out in the snow and ice, and retailing was one of the main casualties,” Synovates Tim Denison said. “These figures are weather-related and not indicative of a softening in underlying demand.”

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The final word on holiday gift card sales is not out. Mall of America is seeing gift cards flat through this week compared with a year ago. Mall operator Taubman Centers cited lukewarm sales heading into the final week before Christmas, but saw a rebound in recent days as threadbare shelves have left last-minute shoppers no other choice.

Overall, the recession has stolen gift cardss steam. Reduced consumer spending has extended to gift cards, but frugal shoppers are also turning to buying discounted gifts so they can stretch their budgets. Also troubling is that recipients will likely be stingy when they redeem them, focusing only on deeply discounted items, as they did last year.

That poses challenges for the critical week after Christmas and for 2010 as consumers typically spend more than the cards value. Gift card sales also are a key way for stores to drive traffic in the first quarter, traditionally a quiet time for the industry.

This holiday season, merchants were pulling out all the stops to put them in the hands of consumers. Catalog retailer L.L. Bean, for example, offered a free $10 gift card with purchases of $25 or more; last year, shoppers had to spend $50.

But Cindee Weiss, 41, who works in magazine publishing, hasnt bitten. In Christmas seasons past, she would spend a total of $100 on gift cards at Gap or Anthropologie for four friends, but this year, shes baking cookies and brownies for them.

“In this economy, I have to be a little more aware,” said the Manhattan resident, citing an uncertain job market. She also noted that in tough times, she wanted to do something personal.

C. Britt Beemer, chairman of Americas Research Group, predicts another holiday season of weak gift card sales would be “devastating for retailers.”

Another problem is that more shoppers are giving cash this season, because they couldnt get to the stores or they also want to be even more practical, Beemer said. Typically, about 75 percent of those dollars dont go to stores, but toward paying bills or to restaurants, he said.

“Gift cards popularity hasnt died, but the recession has changed the way that people give gifts,” said Craig R. Johnson, president of Customer Growth Partners, a retail consultancy.

In fact, according to a consumer survey conducted for the National Retail Federation, gift cards still remain the most requested holiday item, but several industry surveys have found that the average person plans to spend less on them than last year.

Best Buy reported that gift card sales rose 40 percent in November, following a big drop last year as consumers cut their spending as the financial crisis escalated.

Riley expects overall gift card sales will fall 4.4 percent this year to $87 billion from $91 billion - with a 3 percent increase in general purpose card sales and a 7 percent decline in store card spending. That follows a bigger 9 percent drop in 2008.

Michael P. Niemira, chief economist at the International Council of Shopping Centers, says hes not sure how fast shoppers will redeem gift cards because there wont be mounds of holiday leftovers as stores slashed inventories.

Many savvy retailers are making sure they have fresh merchandise when shoppers return Saturday. Stores also say theyre aiming to capitalize on a quirk of the calendar - a full weekend after Christmas.

Kathleen Waugh, spokeswoman at Toys R Us, noted that the toy merchant shipped more new merchandise this week compared to the same time last year to take advantage. Wal-Mart Stores Inc. is extending holiday deals such as a selection of top Blu-ray movies for under $20. Its also offering a $50 gift card with an Xbox 360 purchase.

“Shoppers expect to find new deals after Christmas, but we wanted to make this weekend especially exciting,” said company spokeswoman Melissa OBrien.

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Wal-Mart Stores Inc., which started cutting holiday toy prices Sept. 30, is trying to keep consumers coming back by offering a $50 gift card on purchases of Microsoft Corp.s Xbox 360 players through Jan. 1. Promotions intensified after last weekends East Coast snowstorm hurt sales going into Christmas.

“We are going to be very aggressive, weve been aggressive all season,” Toys “R” Us Chief Executive Officer Jerry Storch said by telephone Dec. 23 from Wayne, New Jersey, where the largest U.S. toy chain is based.

Best Buy, based in Richfield, Minnesota, fell 6 cents to $40.70 on Dec. 24 in New York Stock Exchange composite trading. Bentonville, Arkansas-based Walmart climbed 28 cents to $53.60.

The Washington-based National Retail Federation was holding to its forecast for a 1 percent drop in holiday sales, Ellen Davis, a spokeswoman, said Dec. 20. The International Council of Shopping Centers reiterated on Dec. 22 its forecast for a 2 percent increase in sales at stores open at least a year in December, after reporting that the storm slowed growth to 0.4 percent year over year in the week ended Dec. 19.

Out With a Bang?

“We expect a strong Dec. 26 shopping day since it falls on Saturday this year, which should close out December with a bang,” Lisa Walters and Sapna Shah, principals of Retail Eye Partners, a New York-based research firm, wrote in a report. “We expect early-morning specials and compelling offers by retailers to boost selling levels to make up for the slower start to December.”

Fifty-five percent of mothers who shop at Walmart said they like to receive gift cards over the holidays because it allows them to shop the after-Christmas savings, according to a survey conducted by BIGresearch this month. Two out of five moms planning to use their gift cards right away say they will shop right after Christmas to get the best prices.

Saks Inc., the New York-based luxury retailer, said it was offering up to 70 percent off from 8 a.m. to noon today, after which the discounts will revert to 40 percent.

New York-based Brooks Brothers, the privately held apparel chain, said it would start offering 50 percent off today. J.C. Penney Co. said it would open stores at 5 a.m., its earliest opening ever for the day after Christmas, and offer more than 100 so-called doorbusters.

Over the next week, Jos. A. Bank Clothiers Inc., a mens clothing chain, will continue emphasizing price reductions of regular merchandise, more than marking down clearance goods, CEO Neal Black said.

“Youll see a lot of retailers, including us, with very strong offers the week after Christmas,” Black, 54, said Dec. 22 by telephone from the companys headquarters in Hampstead, Maryland. “Were looking for people who waited until after Christmas to see if theres even lower prices. People get enticed to spend gift cards when youve got good offers.”

Black declined to disclose Jos. A. Banks post-Christmas promotional plans. The week before Christmas, it deepened discounts to at least 50 percent on all clothing after the snowstorm hurt sales.

The retailers shares fell 17 cents to $42.82 on Dec. 24 on the Nasdaq Stock Market. Saks lost 12 cents to $6.78 in New York Stock Exchange trading. Plano, Texas-based J.C. Penney dropped 29 cents to $27.02.

The Dec. 19 storm dumped 24 inches of snow on Bethesda, Maryland, and 23.2 inches at Philadelphia International Airport, according to the National Weather Service.

Sales fell 13 percent to $6.9 billion on the last Saturday before Christmas from the previous year, according to Chicago- based researcher ShopperTrak RCT Corp. A year ago, that was the second-biggest shopping day after Black Friday, the day after U.S. Thanksgiving.

“Shoppers have been savvier than ever when it comes to price and promotion this holiday season,” Retail Eyes Walters and Shah wrote. “Promotions have still been needed to get shoppers in.”

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Wal-Mart Stores Inc., which started cutting holiday toy prices Sept. 30, is trying to keep consumers coming back by offering a $50 gift card on purchases of Microsoft Corp.s Xbox 360 players through Jan. 1. Promotions intensified after last weekends East Coast snowstorm hurt sales going into Christmas.

“Its certainly more aggressive than in past years,” Toys “R” Us Chief Executive Officer Jerry Storch said by telephone Dec. 23 from Wayne, New Jersey, where the largest U.S. toy chain is based. The company is closely held.

Best Buy, based in Richfield, Minnesota, fell 6 cents to $40.70 yesterday in New York Stock Exchange composite trading. Bentonville, Arkansas-based Walmart climbed 28 cents to $53.60.

The Washington-based National Retail Federation was holding to its forecast for a 1 percent drop in holiday sales, Ellen Davis, a spokeswoman, said Dec. 20. The International Council of Shopping Centers reiterated on Dec. 22 its forecast for a 2 percent increase in sales at stores open at least a year in December, after reporting that the storm slowed growth to 0.4 percent year over year in the week ended Dec. 19.

Out With a Bang?

“We expect a strong Dec. 26 shopping day since it falls on Saturday this year, which should close out December with a bang,” Lisa Walters and Sapna Shah, principals of Retail Eye Partners, a New York-based research firm, wrote in a Dec. 24 report. “We expect early-morning specials and compelling offers by retailers to boost selling levels to make up for the slower start to December.”

Saks Inc., the New York-based luxury retailer, said it was offering up to 70 percent off from 8 a.m. to noon tomorrow, after which the discounts will revert to 40 percent.

New York-based Brooks Brothers, the privately held apparel chain, said it would start offering 50 percent off tomorrow. J.C. Penney Co. said it would open stores at 5 a.m., its earliest opening ever for the day after Christmas, and have more than 100 so-called doorbusters.

Over the next week, Jos. A. Bank Clothiers Inc., a mens clothing chain, will continue emphasizing price reductions of regular merchandise, more than marking down clearance goods, CEO Neal Black said.

Waiting Game

Black declined to disclose Jos. A. Banks post-Christmas promotional plans. The week before Christmas, it deepened discounts to at least 50 percent on all clothing after the snowstorm hurt sales.

The retailers shares fell 17 cents to $42.82 yesterday on the Nasdaq Stock Market. Saks lost 12 cents to $6.78 in New York Stock Exchange trading. Plano, Texas-based J.C. Penney dropped 29 cents to $27.02.

The Dec. 19 storm dumped 24 inches of snow on Bethesda, Maryland, and 23.2 inches at Philadelphia International Airport, according to the National Weather Service.

Sales fell 13 percent to $6.9 billion on the last Saturday before Christmas from the previous year, according to Chicago- based researcher ShopperTrak RCT Corp. A year ago, that was the second-biggest shopping day after Black Friday, the day after U.S. Thanksgiving.

Some impulse buying and so-called self-purchases were irretrievably lost during the storm, Richard Jaffe, an analyst with Stifel Nicolaus & Co. in New York, said in a Bloomberg Radio interview on Dec. 22.

“Its not a delay, its lost sales,” Jaffe said. “You just dont recover that.”

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