Retailers entering the holiday shopping season are cautiously optimistic after several years of conservative consumer spending.
Following a dip in 2008 and minimal growth last year, experts say holiday sales nationally in the 55-day period from Nov. 1 through Christmas Day will rise about 2.3 percent to reach $447.1 billion this shopping season.
“We’re still in somewhat of an uneven economic environment,” said Scott Krugman, vice president and spokesman for the National Retail Federation, which forecasts holiday sales each year. “Consumers are still a little concerned, considering high unemployment, and retailers are planning the season with the recession in the back of their minds. They’re still very cautious with the amount of inventory they’re bringing in.”
For Kennedy Jewelry on East Main Street — whose holiday sales make up about 20 to 25 percent of annual sales — careful inventory planning is essential for the next two months.
Store Manager Jeremy Kennedy said sales have been “on the sluggish end” for the last couple of years, with consumers interested in price-oriented pieces in the $200 to $400 range. Whereas before the economy tanked, higher priced gold and diamond goods were staples of the holiday season, Kennedy said sterling silver, which fits into the cheaper price range, is what’s now in demand.
To offset low sales, Kennedy said the jewelry store has been strongly buying and selling gold for the past two to three years.
HOLIDAY SHOPPING OUTLOOK
* Sales are expected to rise 2.3 percent this year from 2009 levels, totaling $447.1 billion nationally.
* The holiday season can represent 25 to 40 percent of annual sales for some retailers.
* Since beginning tracking holiday sales in 1992, 2008 was the only year sales have declined. They were down down 3.9 percent that year.
Source: National Retail Federation
WHEN DOES HOLIDAY SHOPPING BEGIN?
In 2009, the following percentages of consumers began their holiday shopping in:
* 38 percent: November
* 20.2 percent: October
* 17.4 percent: First two weeks of December
* 13.4 percent: Before September
* 6.1percent: September
* 4.8 percent: Last two weeks of December
Source: National Retail Federation
BLACK FRIDAY MALL HOURS
* Hamilton Place mall: 5 a.m. to 10 p.m.
* Northgate Mall: 6 a.m. to 10 p.m.
* Walnut Square in Dalton, Ga.: 6 a.m. to 10 p.m.
* Bradley Square in Cleveland, Tenn.: 5 a.m. to 10 p.m.
Notation: Black Friday is the Friday after Thanksgiving that traditionally kicks off the holiday shopping season.
“That’s been more than carrying the load for the last little while,” he said. “People are buying gold bullion — coins and such — because they don’t know what will happen. With the dollar like it is right now and the current economy, people are scared I guess.”
Krugman said although the gap between price, quality, service and selection is beginning to ease nationally, “price is still the No. 1 factor that consumers take into account” when conducting their holiday shopping.
“I think you’re going to see retailers still very aggressive in their promotions,” he said.
Stores such as Sears, Walmart, Target and Kohl’s have already begun to advertise holiday specials and sales, with several other national retail chains announcing plans to hire thousands more seasonal workers than last year.
The holiday shopping season is also beginning to extend further into fall, with as many as 20 percent of shoppers opting to start their seasonal shopping in October, according to the National Retail Federation.
That bodes well for increased sales, according to an analytics-based forecast by IBM that projects spending momentum from October to November to be stronger than in previous years. The forecast cites the rising household savings rate and disposable income as possible indicators for pent-up consumer demand.
Still, savings is the buzz word for this holiday shopping season.
“I think the trend toward value is going to be here to stay for awhile,” said Catharine Wells, group marketing director for Hamilton Place mall.
She said this year’s mall holiday coupon book reflects amplified efforts by retailers to rein in consumers with eye-opening deals.
“Instead of just the normal 10 percent off of a purchase or an item, we are seeing a whole lot more of 20, 25 and 30, and even up to 50 percent off a lot of different offers this year,” Wells said.
But cut-throat deals by larger retailers can have a crippling effect on their small business counterparts as they approach the holiday shopping season.
Mike Woodlee, owner of Woodlee Appliance, said until last month he felt “pretty good” about going into the latter half of the year, but a 40 percent decrease in October sales caused him to cut back on the amount he typically orders for November and December.
“I think the big boys are being really, really, really competitive,” he said. “They’re giving this percent off, that percent off — they’re mowing your yard, changing your oil and walking your dog for you. We’ve normally never had problems pricing with the big boys, but they’re getting really aggressive now and we’re having to try to stay there with them.”
Brittany Cofer is a business reporter who has been with the Chattanooga Times Free Press since January 2010. She previously worked as a general assignment Metro reporter. In the Business department, she covers banking, retail, tourism, consumer issues and green issues. Brittany is from Conyers, Ga., and spent two years at Kennesaw State University in Kennesaw, Ga., before transferring to the University of Georgia. She graduated from the university’s Grady College of Journalism in December ...