Michigan retailers upbeat for holidays
Jaclyn Trop / The Detroit News
Michigan is expecting a merrier holiday shopping season than the nation when the official gift buying season starts in earnest in two weeks.
The state’s retailers expect a 6 percent increase in holiday spending, while most national industry groups and analysts expect a second straight year of sales increases at a clip of roughly 3 percent nationwide.
Michigan’s projected growth is fueled in part by its better bounce than other states in the economic recovery after its steeper fall during the recession.
But big box retailers here and nationwide say it will be a highly competitive selling season, and they’re rolling out all stops in a bid for Black Friday shoppers.
“We’re buying less, so we’re putting a higher standard to what we do buy, and we’re willing to do the legwork,” said Susan Yashinsky of Sphere Trending, a trend consulting firm in Waterford Township.
Stores including Target, Staples and Bed Bath & Beyond have holiday price-matching guarantees, while others such as Walmart, Sears and Kmart tout their layaway programs. Several stores are opening hours ahead of usual to kick-start their Black Friday sales. The National Retail Federation expects the average shopper to spend about $15 less this year on gifts and home decor — $704.18 this year compared with $718.50 last year. Retailers know consumers remain sensitive to price amid concerns over job loss and the economy coupled with rising food and energy bills.
“The consumer confidence measure is the perception, and the perception is the reality,” said Jeff Green, president and CEO of Phoenix-based retail consultant Jeff Green Partners.
Nine out of 10 shoppers plan to spend the same or less than they did last year and say discounts will influence what they buy, according to Accenture’s annual holiday shopping survey of 500 consumers.
Price matching consequently will be a major theme for the season, with Target, Staples and Bed Bath & Beyond offering to match even Amazon.com’s lowest prices. Walmart’s Christmas price guarantee excludes Internet retailers but gives consumers until Christmas Day to return to the store for price adjustments on all merchandise, from television sets to toys.
Sears’ offer to beat a competitor’s best price by 10 percent applies to bricks-and-mortar retailers with websites but not to Amazon.
Meanwhile, Sears, Kmart and Toys R Us are also promoting their layaway programs, as is Walmart, which began offering the option last month after discontinuing it in 2006.
“I think (the season) will be very promotional,” Yashinsky said. “Consumers have gotten very smart. They want the incentives, and they need the incentives.”
Black Friday to start early
The planned spending freezes and cuts by most shoppers mean that retailers need to get a head start in cornering consumers. The annual Black Friday shopping bonanza is bleeding into Thanksgiving Day, with more stores opening on the national turkey day than ever before.
Best Buy, Target, Kohl’s, Parisian and Macy’s will open at midnight, hours ahead of their usual pre-dawn Black Friday opening.
Great Lakes Crossing Outlets in Auburn Hills will open its doors at 9 p.m. on Thanksgiving, three hours earlier than last year.
“They were lining up and raring to go well before midnight last year,” said General Manager Kimberly Savona. “I just think the trends are changing.”
But Black Friday remains an important day, garnering more sales and foot traffic than any other day of the year.
Shoppers spent $10.69 billion on Black Friday last year, the largest dollar amount ever recorded on that day, according to Chicago-based retail analyst ShopperTrak.
Despite the slim budgets, the holidays won’t be doom and gloom for consumers as they were in 2008 in the middle of the national recession, Yashinsky said. Shoppers have adjusted to the “new normal” and enjoy searching for bargains.
“People are happier, and they’re smelling the roses,” Yashinsky said. “For the 91 percent who are still employed, it’s about buying less and buying more meaningfully.”
That’s why shoppers this year are spending more on entertaining. The National Retail Federation expects the average consumer to spend $188.24 — 5.6 percent more than last year — on holiday decorations, cards, candy, food and flowers.
Sales rises predicted
The International Council of Shopping Centers and ShopperTrak each project a 3 percent rise in holiday sales. The National Retail Federation is marginally less optimistic, expecting sales to rise 2.8 percent, slightly higher than the 10-year average holiday sales gain of 2.6 percent.
But retailers do have cause for hope.
A 5.4 percent decline in the average shopper’s spending on gifts ($515.94) will be tempered by a 16.2 percent increase in spending on herself ($130.43), according to the federation.
Providing further hope for retailers is the expectation that high-income shoppers will counter cost-conscious shoppers with more splurges and expensive purchases.
Luxury retail is estimated to rise 7.5 percent after sputtering through several years of declines, according to the International Council of Shopping Centers. Discounters, which reported robust gains during the recession, will see more moderate projected growth of 2.5 percent.
But some of those projected gains could be attributed to rising prices for luxury goods, said Pam Danziger, founder of Unity Marketing, a Stevens, Pa.-based firm specializing in luxury goods.
High-income consumers remain cautious and are not ready to return to the heady days of luxury consumption, Danziger said.
“I think they’re very concerned about what’s going on in Europe and what’s going on overall in the world,” she said. “It’s a very precarious time.”