Despite an economy that has been so lethargic that calling it sluggish is almost a cliché, retailers and analysts expect holiday spending to be up this season.
Falling gas prices have given consumers more money to spend, and the things they want to buy haven’t climbed much in cost, experts say.
Moreover, while unemployment remains high and Americans remain wary of the economy, consumers who do have jobs are spending again as they gain confidence that their jobs and financial situations are more secure, analysts say. It’s a switch from the dark days of 2008 through 2010, when constant news of layoffs and uncertainty about the longevity of the recession spooked consumers into staying home.
Optimism among the employed is expected to boost holiday sales 3.9 percent to $602.1 billion during November and December, the National Retail Federation said earlier this month. Holiday sales grew 3.5 percent during the same period last year.
It’s important that the season is a success. Between 20 percent and 40 percent of a retailer’s income is made during the two months, the NRF said.
The season produces thousands of temporary holiday jobs, and several of the nation’s largest retailers have already announced adding to their employment rolls nationwide, including Macy’s with 83,000 hires, Toys “R” Us with 45,000 and Kohl’s with 50,000.
Internet sales, which have boomed in the last decade largely at the expense of brick-and-mortar operations, also are expected to grow during the season, rising from $53.7 billion in 2012 to about $61.8 billion this year, according to eMarketer.com.
But this holiday period will be the first in which online giant Amazon will collect sales taxes on items bought in Georgia. The change began in September, and brick-and-mortar store operators hope it will level the playing field.
Amid the upbeat retail outlook, some analysts sounded a note of caution. They said the chaos in Washington over the government shutdown and raising the debt limit could force consumers to tighten purse strings.
“Consumer confidence already dropped in August and September just on the dispute (leading up to the shutdown),” said Roger Tutterow, an economist at Mercer University. “The real question is when will we have a resolution.”
Others argue that lingering unemployment could also have an impact.
Opportunities for seasonal jobs will be there, but they probably won’t improve on last year’s record numbers, which hit a 12-year high, employment consultant Challenger, Gray & Christmas said in a recent report.
“While the economy and job market are improving, it has now been four years since the recession officially ended, and millions of Americans are still unemployed or underemployed,” John A. Challenger, chief executive officer of the company, said in releasing the findings in late September. “As a result, consumers remain uneasy, which is evidenced by wide monthly mood swings in confidence surveys.”
Kelly Scott Wolff is looking on the bright side. Wolff opened Hunter’s Collective, a Buckhead jewelry store, two weeks ago and is counting on the holidays to help her get the fledgling business off the ground.
Nationally, holiday sales at jewelry stores are predicted to increase 4 percent this year over the same period in 2012, she said. And consumers are expected to increase their spending in the segment by 10 percent.
“I specifically picked this time because I think it’s one of the best times to get feet in the door,” Wolff said. “This is a good time to let people know I am out here.”
Accenture, another consultant, is also bullish on the holiday season. Surveying 500 consumers online in September, the company found the average customer will spend $646, up 11 percent over the previous year, and 41 percent will shop at brick-and-mortar stores on Black Friday. The majority of online shoppers will make purchases on their desktops, though a growing number will use their phones or tablets to complete transactions.
Electronics, traditionally a popular item, are expected to increase 4 percent, according to the Consumer Electronics Association.
Jeremy Baier, a spokesman for electronics king Best Buy, wouldn’t discuss sales expectations, but gave a reason for being optimistic: “This holiday is also the first full year of our price-match policy, which we believe will drive traffic online and in our stores.”
For some retailers, the holidays are already here and they have stocked shelves with items to lure customers.
“Yes, we have our trim shop set up,” said Dave Penrod, chairman for the Southern division of retail giant Belk. “It’s responding to our customers and what they are looking for.”
Others, such as Judy Johnson, the owner of Sandpiper, a women’s clothing boutique in Vinings, are holding off. Johnson, who said business is up 10 percent over the same period a year ago, said introducing holiday merchandise now could cannibalize sales of fall offerings by influencing customers to skip them and focus on winter.
“We don’t want people to jump forward and leave the fall merchandise behind,” she said.
One of the biggest challenges, however, has nothing to do with the timing of holiday merchandise. Many retailers said the growth of online commerce has forced brick-and-mortar store operators to up their game.
To keep consumers from clicking a mouse, retailers have to keep their stock fresh and different, said Jim Whitlow, owner of Deka, a women’s clothing store in the Around Lenox shopping center in Buckhead. During the holidays, consumers are eager to shop. But to lure them in, the merchant must have something eye-catching to separate his items from the pack.
“In retail, you have to beat to your own drum,” he said. “And to get ahead, you have to be old school and get into customer service.”
For others, the solution is to have a foot in both worlds. Doug Henderson, who co-owns Switch Modern furniture store with Roy Otwell, is promoting holiday business both online and in a new 25,000-square-foot showroom of which they plan to open a portion in late November on 14th Street in Midtown, just steps away from Progressive Lighting.
But don’t look for the owners to throw up holiday decorations before Thanksgiving.
“I think people get overwhelmed with that holiday shopping advertising too soon,” Henderson said.
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