Coming off of a weak back-to-school shopping period, a research firm expects holiday sales growth will be slower this year during the crucial holiday season. Shoppers also are expected to visit fewer stores as they research purchases online.
Retail revenue in November and December should rise 2.4 percent during the biggest shopping period of the year, Chicago-based research firm ShopperTrak said last week. That compares with a 3 percent increase in 2012 from 2011.
“Although the economy continues to recover slowly, consumers remain cautious about spending and are not ready to splurge,” said ShopperTrak founder Bill Martin.
While the job picture has been improving in the U.S. and the turnaround in the housing market is gaining traction, the improvements have not been enough to sustain higher levels of spending for most Americans. Most continue to juggle tepid wage gains with a higher cost of living.
Revenue at stores opened at least a year – a measure of a retailer’s health – rose 3.6 percent in August, according to a tally of 10 retailers by the International Council of Shopping Centers. That’s up a tad from July’s 3.5 percent gain, but below the 6 percent gain in August last year.
The cautious spending last month capped a weak back-to-school selling season for retailers and raised questions about whether Americans would spend in November and December, a time retailers can make up to 40 percent of their revenue for the year.
ShopperTrak expects traffic will fall 1. 4 percent during November and December, compared with a 2.5 percent increase in 2012. That’s partly due to people researching purchases more diligently before they go out shopping, Martin says.
“They’re still purchasing the same amount and product they intended to; they’re just not roaming from store to store looking for it,” he said.
In addition, there’s a shorter shopping window between Black Friday – the day after Thanksgiving, which usually is the biggest shopping day of the year – and Christmas. Last year, there were 32 days during the period and this year there are 25.
Weekends are the busiest shopping period within that time frame. There are four weekends this year compared with five last year. Because of that, Martin expects stores to bring out their promotions and services such as layaway early – Toys R Us and Wal-Mart Stores Inc. already have announced their layaway plans. Layaway plans let consumers pay over time for holiday gifts.
“Retailers must have their holiday marketing and operations ready to go when November begins, as consumers will be ready to take advantage of those deals,” said Martin.
The retail industry still is waiting for a widely watched holiday forecast from the National Retail Federation, the nation’s largest retail trade group, which will be issuing its report in early October.
But the prediction from ShopperTrak, which counts foot traffic at 60,000 stores and blends it with government figures and its own proprietary sales numbers from stores, offers one of the first insights into how shoppers might spend during the season.
‘Hot’ toys
Toy sellers are gearing up for the holiday season: Wal-Mart Stores, Kmart and Toys R Us have all come out with their “hot” toy lists. While no one can predict which toys will spark crazes, a few toys have made all three lists. Here’s a look at which toys are retailer favorites early in the season:
Hasbro’s Big Hugs Elmo from Hasbro, $59.99: Ever since Tickle Me Elmo became a craze in 1996, an iteration of Elmo usually pops up on annual holiday lists. This year’s version, Big Hugs Elmo, is a cuddly version that sings and talks with bendable arms that give out hugs to tots.
Doc McStuffins Get Better Check Up Center from Just Play, $95. The character from the Disney Junior show is about a girl who wants to be a doctor and fixes toys and dolls, which come to life when she puts on her stethoscope. The Get Better Check Up Center is a play set that has lights and sounds and medical equipment toys such as a reflex hammer and scale. Toys R Us has an exclusive version for $79.99 that includes a Lambie doll and lab coat.
Sofia the First. Another Disney Junior character, Sofia becomes a princess at age 7 when her mother marries a king. Retailers each have a different Sofia the First toy on their hot lists: Wal-Mart is featuring the Talking Sofia doll and Animal Friends Playset for $32.88; Kmart is featuring Jakks Pacific’s Transforming Dress and Trunk as an exclusive; and Toys R Us is featuring a Jakks Pacific royal talking vanity for $79.99.
Flutterbye Flying Fairy from Spin Master. The $29.99 doll floats in the air after a button on the display is pressed. Kids can direct the doll using their hand.
– Associated Press
