BY BRADEN LAMMERS
Spreading that holiday spirit without spending a lot of cash is increasingly important this year for families across Southern Indiana. The need to save a few extra bucks, but still get that big ticket item, is what drives many to rise at the crack of dawn and brave massive crowds at Black Friday sales.
But according to some experts, the stores may not be as packed this year, largely because retailers started offering holiday deals earlier than normal this year.
“Most retailers are running specials early,” said George Whalin, president and CEO of California-based Retail Management Consultants.
Offering deals before Black Friday — the unofficial start to the holiday shopping season — was this year’s plan from a number of retailers attempting to capture the largest segment of the market, he said.
Sejin Ha, assistant professor at Purdue University’s college of consumer and family sciences, says she saw the evidence first-hand on a shopping trip to an outlet mall recently, as many retailers had already begun their Black Friday sales.
“It looks like many retailers are expanding their period of sales for Black Friday,” she said. “I think they are expanding the sales because of the economy.”
For the second year in a row, the economy is expected to have a major affect on retail sales figures, which may shrink the size of the crowds lining up in the predawn hours Friday.
“Two-thirds of Americans said the economy will affect their holiday plans this year, with the majority of these consumers saying they’re adjusting by simply spending less,” according to the National Retail Federation’s 2009 Holiday Consumer Intentions and Actions Survey, conducted by BIGresearch.
The National Retail Federation, or NRF, is projecting holiday retail industry sales to decline percent this year to $437.6 billion, with the budget for the average shopper also shrinking compared to last year, from $705.01 to $682.74.
And although the expected holiday sales for this year should fall well below the 10-year average of 3.39 percent growth, the decline for 2009 is not nearly as dramatic as last year’s 3.4 percent drop, the NRF said.
“As the global economy continues to recover from the worst economic crisis most retailers have ever seen, Americans will focus primarily on practical gifts and shop on a budget this holiday season,” said NRF Chief Economist Rosalind Wells, in a press release.
However, Whalin believes the NRF’s prediction of a 1 percent drop in retail sales might be optimistic.
“I think it’s going to be more than that, maybe 3 to 4 percent,” he said.
The decline is no surprise to retailers who have seen drops in sales all year long.
“The expectation of another challenging holiday season does not come as news to retailers, who have been experiencing a pullback in consumer spending for over a year,” said NRF President and CEO Tracy Mullin in a press release. “To compensate, retailers’ focus on the holiday season has been razor-sharp, with companies cutting back as much as possible on operating costs in order to pass along aggressive savings and promotions to customers.”
Those promotions and aggressive marketing are epitomized by some of the impressive deals being offered to lure customers into their stores. Many of those can be seen in inserts in today’s newspaper.
Despite the predictions and statistics that 2009 will not be a banner year for retailers, the holiday season and its unofficial kickoff still matters.
“The importance of Black Friday has not been diminished,” Whalin said.
Even with the expectation of a lower turnout, swarms of crowds are still expected to rush stores tomorrow, and it could act as a barometer for retail figures for the rest of the holiday season.
The NRF survey said more than half of holiday shoppers say that sales, price discounts or everyday low prices will be the most important factor when deciding where to shop. For certain retailers — such as jewelers and toy stores that are highly dependent upon the holiday shopping season — and for stores that sell a large volume of electronics, a large number of units moved might not equate to a big profit.
“Certain popular holiday categories ... may experience deflation due to aggressive sales,” the NRF press release said.
Those aggressive sales also could lead to some customers losing out on the items they are looking for if they don’t act quickly enough.
“In anticipation of weak demand, many retailers scaled back on inventory levels to prevent unplanned markdowns at the end of the season,” Mullin said. “Once the most popular items are gone, retailers won’t have anywhere to get them, so if there was ever a holiday season to buy early, this is it.”
