Retail season starts strong, but a long haul ahead
Sales were better than expected this past Black Friday, but will it last till Christmas?
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"Under these circumstances, to start off the season in this fashion is truly amazing and is a testament to the resiliency of the American consumer, and undeniably proves a willingness to spend," Bill Martin, ShopperTrak's cofounder, added in a statement.Skip to next paragraph
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One ray of sunshine for retailers is the falling price of gasoline. Since its peak in July, gasoline prices have fallen $2.21 a gallon to an average US price of $1.81 a gallon, according to GasPriceWatch.com.
"It takes a bit of the edge off," says Mr. Zandi. "But if you don't have a job, you're not [driving] to work."
Americans are likely to get an additional shock this week when the US Labor Department reports the unemployment rate for November. Normally, retailers beef up their staff with temporary hiring during the holiday shopping season. But this year, such seasonal hiring is not happening, says Nigel Gault, chief US economist at IHS Global Insight in Lexington, Mass. As a result, the unemployment rate could jump from 6.5 to 6.8 percent, IHS predicts. Job losses for the month could total 370,000, the worst employment numbers since May 1980, Mr. Gault says.
"It's very rare to get jobs falling as sharply as that," he says.
The job losses in the Midwest could be particularly devastating, Feinberg says. In Indiana alone, he says, 27,000 people could lose their jobs. "[Indiana's] unemployment is already above the national average, and spending is way down," he says. "Most of the spending is going to Wal-Mart, Costco, and other discounters to make money go further."
Discounts resonate with a lot of consumers. In Rochester, N.Y., Marcia Layton Turner was on the road at 4 a.m. on Friday to shop at Bon-Ton, a department store, and other retailers offering discounts. "It was a madhouse," she recounts.
Ms. Turner, a bestselling author, got what she was looking for. She purchased an $80 comforter for $19.95, some $60 sweaters for $19.97 each, and holiday ornaments at about 60 percent off.
Still, she expects to spend a little less than last year. "I'm trying to be practical and not go crazy," she says.
She and other shoppers will have less time to shop this year because there are only 27 shopping days between Thanksgiving and Christmas. Last year, there were 32. ShopperTrak believes that retailers may have to continue their deep discounts until the Saturday before Christmas.
At least the weather appears to be cooperating. According to AccuWeather.com meteorologist Alan Reppert, it appears that the Midwest and East Coast will experience temperatures 4 to 6 degrees F. below normal through the end of December. Colder temperatures tend to put shoppers in the mood to buy winter apparel. Meanwhile, the Plains states are expected to have normal temperatures, as will the Southeast. And the West Coast could be warmer than normal. In terms of precipitation, only the Great Lakes and some parts of the Pacific Northwest could have higher than normal amounts.