Retail prophecy: Expect big holiday business
BOSTON — Get ready. Get set. Go!
Head for the mall. Prowl the department stores. Leave the discount stores laden. There will be lots of bargains. Forget the Asian contagion. The time has come to shop for Christmas.
Buy! Buy! Buy!
That's what retailers want you to do. And that's what their surveys are saying will happen.
Sales in November and December will be up 5 to 6 percent from the same months a year ago, predicts the National Retail Federation in Washington and Deloitte & Touche, a consulting firm. That percentage gain is partly based on a write-in survey of 1,000 consumers.
If sales do grow that much, it would be the best holiday season since 1994's 8 percent gain, says Irwin Cohen, a New York-based expert on consumer business at Deloitte & Touche.
Retail sales in the United States did rise 1 percent in October from the month before. That was better than economists expected. It shows consumers haven't been frightened by the Asian scene, they reckon.
New buying attitudes
This year, the survey found, consumers are shifting toward a greater price consciousness and value from an earlier emphasis on "selection" and "quality."
Bargain hunters could do well.
Prices on average won't be up much. The consumer price index for October, released last week, showed that the inflation rate for the first 10 months of this year was 1.6 percent, better than the 11-year low of 1.7 percent for all of 1997. The CPI climbed 0.2 percent in October
Most economists see inflation as something of a phantom. It could reappear, but it hasn't.
Rate cut impact
Without any blatant sign of a rebirth of inflation, the Federal Reserve felt free to cut interest rates again last Tuesday.
Fed policy is one of several elements Mr. Cohen looks at in predicting holiday retail sales. Others include sales of general merchandise, apparel, and furniture and furnishings (GAF - up 7 percent this year), personal income (up 4.9 percent), and consumer confidence (down but still good).
The recovery in the stock market should also be favorable for sales at "the high end," says Cohen. Most corporate shares are held by those in the top 10 percent income bracket.
And the end to the latest threat of war in Iraq was a great relief. Retailers suffered during the Gulf War.
Retailers sometimes feel a bit guilty about the "commercialization" of Christmas.
So, Cohen notes, retailers have been striving with a little success to move more sales into the first 10 months of the year.
In 1988, about 25.3 percent of GAF sales took place in the final two months. Holiday spending in 1997 was down to 23.8 percent of annual sales.
Part of the reason for this shift, Cohen says, also may be that consumers are spending somewhat more on services at holiday time. They give a vacation trip, spa visit, restaurant vouchers, and other services.
The International Council of Shopping Centers, New York, analyzes the last minute rush by shoppers. It finds that 9 percent of holiday buying takes place at Thanksgiving, 16 percent Dec. 1-7, 20 percent Dec. 8-14, 44 percent Dec. 15-24, and 11 percent after Christmas, Dec. 26-31.
The biggest sales day is the Saturday before Christmas.
As "fun facts," the ICSC notes that most malls began decorating Nov. 1; that "Jingle Bells" was the song played most frequently last year, "White Christmas" next.
Consumers expect on average to buy 25 presents and spend $814 this season, the Deloitte & Touche survey found.