Shoppers face holiday choices
Eileen Smith / Courier-Post
The frost hasn’t formed on the Halloween pumpkin, the Thanksgiving turkey is weeks away from the roasting pan — and retail watchers already are predicting Grinchlike holiday sales.
A view glimpsed through their crystal balls:
• The National Retail Federation predicts shoppers will spend an average of $704.18. That’s $14 less than last year.
• PriceGrabber says 52 percent of consumers will spend $500 or more, and 36 percent will spend less than $500. The rest haven’t thought about a budget, says the online comparison shopping site.
• SymphonyIRI’s Holiday Shopping 2011 survey says 26 percent of shoppers plan to spend less on holiday gifts, with 16 percent cutting back on feasts and 11 percent pouring less into beer, wine and spirits. Three of four consumers will set their spending limit at $800.
Then there’s the Lisa Brown report. The homemaker from Mount Laurel will spend less this year because her husband was laid off from his sales job.
“He got a very good package that will take us well beyond Christmas,” Brown said. “But we don’t know how long it will take him to find a new position.”
The NRF says job jitters is only one component in a heap of consumer concerns.
“Persistently high unemployment, an erratic stock market, modest income growth and rising consumer prices are all combining to impact spending this holiday season,” says Jack Kleinhenz, chief economist for the Washington, D.C.-based trade group.
Retail analyst Jeff Green of Phoenix-based Jeff Green Partners said worries about the economy are dampening shoppers’ spirits. He predicts sales will rise an anemic 1 percent over last year’s cheerless figures.
“The economy has trained us to hold back and really shop for bargains,” he said.
Still, Santa is expected to pull a few surprises out of his sack this season. Department stores will win back customers. Luxury retailers will get a boost from well-heeled shoppers. And tight inventories could translate to prices going up instead of down as the holiday approaches.
“Will retailers cut it so close that the most popular merchandise could be out of stock before Christmas?” Green asks. “I think so — and increased demand will drive up prices for those goods.”
He predicts that department stores, squeezed in recent years by discount retailers, will see less red ink and more greenbacks this Yule.
“Department stores have become much more promotional,” Green said. “Macy’s, in particular, has persuaded consumers that they are getting better quality merchandise at a great value.”
Luxury retailers will continue to benefit from an affluent customer base with more disposable income and fewer fears about economic security.
“Louis Vuitton and Neiman Marcus are doing quite well, Coach is doing better and Nordstrom is on fire,” he said.
On the local front, Green predicts an uptick in centers that offer upscale shopping.
“The Cherry Hill Mall is looking very good this year,” he said. “I also like the Promenade at Sagemore and the upgrades at King of Prussia.”
Overall, retailers will be reluctant to raise prices because 81 percent of Americans already are concerned about higher costs for food and fuel, according to the annual Accenture Pricing Shopping Survey.
In response to consumer obsession with the bottom line, Walmart will roll out its Christmas Price Guarantee on Nov. 1. Shoppers who buy an item at Walmart and find it for less at another store will receive a Walmart gift card for the amount of the difference.
The world’s largest retailer also is offering free shipping on 95 percent of the goods it sells online.
“The greatest gift we can give our customers this holiday is great low prices on the things they want most,” said Duncan MacNaughton, chief merchandising officer.
Brown’s goal is to get as many gifts as she can within her carefully crafted budget.
“We decided on a certain amount of money for each child — and when it’s gone, it’s gone,” she said. “In other years, I went over the top and now I realize that half the things I bought wound up going back to the store.”
She already has started shopping, buying a few articles of clothing for her two children.
“I like to shop at sales when everything in the store is discounted 40 percent,” she says.
Still, most shoppers won’t start buying in earnest until Black Friday, according to the PriceGrabber report.
That is because consumers believe the best deals aren’t rolled out until the day after Thanksgiving, the traditional start of the holiday shopping season.
“Our survey findings indicate that more than half of respondents expect to find great bargains during the entire four weeks between Thanksgiving and Christmas,” says Graham Jones, general manager.
Nearly two-thirds (64 percent) of consumers say they won’t open their wallets until merchandise has been discounted at least 30 percent, according to a recent Citi Investment Research & Analysis survey. That is up from 54 percent last year.
Ten percent say they will hold out for markdowns of 60 percent or more.