Gift Card Purchases Alter Traditional Holiday Shopping Period

Mobil Oil introduced the first gift card in 1995 and since then the market for the one-size-fits all solution for holiday shopping has boomed to an estimated $80 billion in sales for all of 2007.

Not only has the gift card changed the way many consumers shop, it has also extended the traditional holiday sales period into January.

While gift cards have affected year-end sales totals for retailers, they have provided a boost to the traditionally weak first month of the year that was often characterized more by returns and refunds than by redemptions.

The International Council of Shopping Centers now considers November-January the “new” holiday season, and for good reason. The ICSC estimates as much as 30 percent to 40 percent of holiday gift cards – $15 billion to $20 billion – will be redeemed in the week after Christmas and during January.

The last-minute nature of a gift card purchases coincides with the trend of many consumers to begin their Christmas shopping later and later each year.

Later Shopping Skews Numbers

ICSC’s survey of consumers has found that the number of consumers who begin shopping before Oct. 31 has declined from 29 percent to 22 percent since 2005, and the number beginning their shopping period on Black Friday dipped from 13 percent in 2006 to 10 percent in 2007.

The number of customers beginning their shopping during the second week of December has nearly doubled, from 5 percent in 2005 to 9 percent in 2007.

This late-starting trend, along with the rise in gift cards and online shopping, has made year-over-year, same-store sales an increasingly tougher indicator of retail performance, not to mention the monkey wrench it throws into inventory decisions.

Tesco DC Targeted By California EQA

British grocer Tesco has found it isn’t just Wal-Mart Stores Inc. that has a tough row to hoe in California.

The challenger to Wal-Mart’s grocery business opened its first Fresh & Easy stores this fall in Phoenix, Las Vegas and southern California, but its 820,000-SF distribution center in Riverside, Calif., is under fire from a group with possible ties to the United Food and Commercial Workers union that opposed Wal-Mart’s California expansion plans.

The Tesco DC, constructed on the old March Air Force Base, was initially told by the governing authority of the base that it did not have to conduct an environmental impact study in accordance with the California Environmental Quality Act. A judge has ruled in favor of Health First, which brought the suit, and ordered Tesco to perform the environmental impact study.

Such a study could take a year to complete, and there is at least a remote possibility that the DC could be ordered shut down in the meantime, taking Tesco’s new U.S. venture with it until any environmental mitigation is addressed.