Holiday shopping in question
There’s no doubt that shoppers will jam into stores and surf the Internet over the next month looking for their holiday buys.
But will the big crowds translate into big sales for the nation’s retailers? That’s the question on lots of merchants’ minds this Thanksgiving weekend, the official start of the Christmas shopping season.
”We had a great start to this year, but we’ve seen spending slow down a little bit and no one is sure what that will mean for this holiday season,” said Michael Niemira, a retail analyst at Bank of Toyko-Mitsubishi in New York.
It’s been a blockbuster year for retailers both traditional and online stores but a lot is riding on the next five weeks, when most storeowners tally a significant portion of their annual sales. Last year, merchants rang up more than $170 billion in sales during the holiday period.
With consumer confidence remaining strong, unemployment levels at 30-year lows and stock prices continuing to climb, expectations are high for this year. Estimates are that Americans will spend at least an average of $500 per family.
Analysts project sales at traditional stores will rise 5 percent to 6 percent from last year, while online sales are expected to at least double from December 1998.
But retailers have learned from the past that their bold forecasts aren’t always on target. With shoppers more fickle today than ever before, anything can keep them home. Already in November, sales have been hurt by unseasonably warm weather, which has reduced demand for winter clothes and coats.
Further dampening consumers’ urge to spend are the three interest rate increases this year by inflation-fighters at the Federal Reserve, moves which have made it more expensive to buy on credit.
”The economy remains strong, but it’s things like the interest rate hikes that set an alarm off in the consumer’s mind,” said Phil Kowalczyk, a retail analyst at the Atlanta-based consulting firm Kurt Salmon Associates. ”It’s not clear how that will play out this holiday season.”
Shopowners alsoo kick off the holiday season this weekend with lots of buying. In recent years, more shoppers have browsed during the Thanksgiving weekend and deferred most of their gift-buying until sales closer to Christmas.
While the day after Thanksgiving starts the shopping spree, it no longer is the busiest shopping day of the year.
Last year, when about 46 percent of Americans did their holiday buying in the 10 days before Christmas, it was the eighth busiest shopping day. Just 9 percent bought gifts during the 1998 Thanksgiving weekend, according to the International Council of Shopping Centers.
, a New York-based trade group.
Most bricks-and-mortar merchants don’t want to wait until mid-December to start moving goods. So they are offering steep discounts this weekend, and some even opened on Thanksgiving and offered special deals.
Many stores also hope an early start to Hanukkah, which begins Dec. 3 this year, will prompt some shoppers to buy sooner.
The Internet merchants are also running promotions to drive traffic to their sites. Unlike traditional retailers, online stores are expected to do the bulk of their sales in early December, which gives ample time for shoppers to receive Christmas purchases.
”Shoppers won’t just be at the mall this weekend, but they will checking things out online,” said Britt Beemer, chairman of the consulting firm America’s Research Group in Charleston, S.C. ”Where they find the better deal is where they might actually make the purchase.”
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