The final Christmas sales figures have yet to be tallied, but if Wal-Mart's announced results are any indicator (and they usually are) retailers faced a flat holiday in 2003. The Bentonville, Ark.-based discounter says it expects growth between 3 and 3.5 percent for the month ending December 24, compared with 2.3 percent growth for the same period in 2002. But there's good news for 2004. Gift card sales are off the charts. Wal-Mart says sales of gift cards were up 20 percent in 2003. And since retailers typically don't count a gift card as a sale until after the card is redeemed, "redemptions may provide a nice boost to top line results post Christmas and into January or February," says Mark Friedman, a specialty retail analyst at Merrill Lynch.



U.S. consumers planned to spend more than $17 billion on gift cards this holiday, almost 8 percent of all holiday sales, according to a survey conducted by BIGResearch for the National Retail Federation. The NRF survey also found that 69.9 percent of consumers planned to buy gift cards this holiday, spending an average of $34.24 per card. "Shoppers coming in to redeem a gift card also tend to spend more than the face value of the card," Friedman says. Almost 40 percent of U.S. consumers plan to redeem their gift cards in January, while 38.4 percent will redeem them immediately, according to a recent America's Research Group poll. And according to ICSC, 54 percent of retailers and 37 percent of malls support a gift card/certificate program.