November 17, 2011

Retailers ready for holiday shoppers

Slightly more money is expected to hit the till in retailers’ cash registers this Christmas season, say national experts and local business owners.

Slightly more money is expected to hit the till in retailers’ cash registers this Christmas season, say national experts and local business owners.

A range of national experts and industry trade groups are forecasting an increase in holiday sales of 2.8 percent to 3.0 percent this season compared with 2010.

Last year, forecasters underestimated the strength of shoppers’ enthusiasm for buying, with sales up more than 5 percent from the year before. But forecasters don’t see that happening again with consumer confidence so weak.

But surprisingly strong October retail sales could mean they’re underestimating shoppers again, cautioned Michael Niemira, chief economist for the International Council of Shopping Centers.

“With this report we are seeing a lot of strength in a lot of categories,” he said. “We don’t think it is sustainable, but it does bode quite well for the holiday season.”

Black Friday will be bigger than ever this year, Niemira said , with 81 million shoppers – more than a third of all consumers – out that day, but the nature of it seems to be changing. Shoppers are most likely to be parents taking the opportunity to grab some deep bargains for themselves and family members, rather than traditional Christmas shopping.

Making Black Friday ever bigger, longer and more bargain-filled is ultimately a problematic strategy, Niemira said. All the heavy discounting means less profits if the sales are displacing sales that would be made anyway, but the stores may feel driven to do it by competition. The biggest selling category, he said, will be gift cards, followed by clothing, toys and games, and music.

Black Friday is a major event for Wichita’s big chain stores. But for smaller stores, Black Friday is simply another day in a hopefully busy Christmas season.

At Powell Jewelry in NewMarket Square, the wreaths are already up and Christmas carols gently fill the air, as shoppers look over display cases of rings and necklaces.

“It gets people to think about it, let them know it’s just around the corner,” owner Daniel Hernandez said of the decor and music.

He said he has seen a 20 percent improvement in store sales between 2010 and 2011, although not necessarily because people overall are spending more on jewelry. He said he has advertised and promoted aggressively to gain market share. That’s why this Christmas is looking relatively bright, he said.

“I’m very optimistic; I see the increase tracking very well,” he said.

This fall has been good, agreed Valerie Reimers, owners of Lucinda’s, a gift store in Old Town. Sales have rebounded from a miserable summer to outpace 2010.

But she said the fall could become a mixed blessing – the weather has been so beautiful that it hasn’t sparked people to get serious about shopping for winter clothes and Christmas presents.

“I love the weather, but our racks are jammed because coats take up so much space,” she said.

Shopping high, low

Shopping and shoppers appear to be pulling in two directions this Christmas.

On Wednesday, high-end clothing chain Saks reported stronger profits because it was able to sell more of its goods at full price during the third quarter.

On the other hand, discount chain Walmart saw its profit fall as it lowered prices to boost sales to its economically stressed core customers. In a conference call Wednesday, company executives said that more of their customers are having trouble affording groceries for their holiday meals and are more likely to be on government assistance than in past years.

Part of that stress comes from the fact that prices have risen an average of 3.5 percent over the last 12 months, according to the federal government. For merchants, it means that even if sales rise by 3 percent, they are actually flat or down in real terms. For shoppers, it means higher prices at a time when many are out of work or wages are frozen.

That kind of wariness about Christmas extravagance came through, even from people who aren’t in desperate straits.

Stephanie Bracy of Wichita, who was shopping at NewMarket Square this week, said she expects to spend about the same this Christmas as last year, but not necessarily because she plans it that way.

“Every Christmas we say we’re going to not spend as much, and every Christmas it never seems to come out that way,” she said with a laugh. “But we’re saving more, definitely. You think about how to put Plan B into effect if you have to.”

Judy Zimbelman of Wichita said she also plans to spend about the same as last year, and noted that economic troubles have caused people to change their spending habits.

“I think people have gotten more conscientious about shopping the deals, clipping coupons,” she said.

But, she added, there’s only so much cutting back that people will do.

“Christmas is Christmas; it only comes once a year,” she said.

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