O come all ye shoppers ... please?
Retail sales are down 8 percent from last year as consumer confidence falls. Prices are following suit.
Ann Marie Peters of Dallas, Texas, didn't plan on buying boots this past weekend. But, when Foley's, a local department store, gave out coupons worth an additional 20 percent off its sale items, she braved the wind and cold to drive to the mall.
"Anytime I get a coupon, I feel like it's a good deal," says Ms. Peters, who figures the boots were half normal price.
Foley's isn't the only one putting out the holiday sale signs early. From a "Sunday Spectacular" at Filene's in Boston to a 50 percent sale on jewelry at Robinsons-May in Los Angeles, retailers are trying to lure the Ann Maries of the world with deep discounts.
While sales are good for consumers - and to some degree take place every December - this year they are a symbol that changes in the economy are starting to impact purse strings. With news reports showing workers getting pink slips and Wall Street in a protracted slide, consumer confidence, one of the hallmarks of the booming 1990s, is finally starting to slip, and retailers are feeling it. "There is some angst out there," says Richard Curtain, head of the University of Michigan's consumer surveys. "We see definite signs of apprehension about future employment and income growth."
When consumers worry, they stop buying.
Nowhere is this more apparent than at the nation's shopping centers, which generally cater to suburbanites. For the holiday shopping period, sales are down 8.2 percent, compared with the same period last year.
"Retail is not exempt from the slowdown - when consumers hear of lay-offs, when gas prices stay high - that hurts," says John Konarski, vice president of research at the International Council of Shopping Centers in New York.
This past week, this shift was apparent at Wal-Mart, one of the nation's largest retailers, which reported that sales were "below plan" as fewer customers hit the malls. The good news, says the retailer, is that those who are buying are not scrimping. But that's not true across the mall. Some retail analysts see many consumers buying less-expensive items.
"Instead of buying an expensive evening outfit, they're buying some accessories," says Kurt Barnard, publisher of Barnard's Retail Marketing Report in Montclair, N.J.
Mother Nature did not help the retail world much last weekend when bad weather hit the Northeast, Midwest, and major parts of the South. Mr. Konarski hopes the consumers have merely postponed their shopping. "Most consumers are ready for a very busy week," he says.
In fact, consumers are not totally spooked. Retail analyst Joyce Baker spent last weekend at several malls in the Baltimore/Washington area. At the Towson Town Center, she says, "I couldn't get in the lot." She had the same problem on Monday. "It was packed, and I saw lots of people with shopping bags."
Although unemployment may start to rise, Ms. Baker does not think it will hurt this year, since the holidays are geared toward children. "Mom and pop may cut back shopping for themselves, but not for the kids."
Last-minute buying binge?
In fact, analysts still don't think this holiday will have retailers sobbing over their sales slips. Consumer analyst Irwin Cohen of Deloitte & Touche, the accounting firm, estimates that retail sales in November and December will be up 4 to 5 percent over last year. And he is optimistic that this coming weekend - in essence an extra weekend for shoppers - will save many retailers.
"It may give it a good shot in the arm - many people are waiting for price breaks," he says.
That's the case with Louise Allen, a bookkeeper at Local 1011, United Steelworkers of America in East Chicago, Ind.
Ms. Allen says she has postponed buying in the hope of finding some good last-minute sales. "I plan to do my shopping as close to Christmas as I can get," she says, adding, "and I might wait until January, because those sales are usually pretty good."
Consumers, in fact, have become so conditioned to sales that many stores offer them as a matter of course at this time of year, anyway. For example, Hillary Meisner of Long Island prefers to spread holiday cheer among stores offering her coupons. And she waited, successfully, to find a sale on a Cuisinart food processor for her father.
Although it was only marked down $10, she says, "I feel better if it's on sale - you know, if you save $10 here and $10 there, pretty soon you've saved $100."
Some of these sales are planned as early as July, since this is one of the most heavily promoted seasons.
Shelves still overflowing
"The promotions drive traffic," says Konarski. At Wal-Mart, the company cuts prices steeply for five hours the day after Thanksgiving. Now, it's rolling back prices on home decorating items.
But some sales are the result of retailers looking at their inventories and starting to worry that the toys, sweaters, and tools will sit on the shelves into the New Year.
Some analysts have spotted two and three series of unplanned markdowns at department stores - making this perhaps the most heavily marked-down holiday period in at least five years.
Part of this, says Mr. Curtain, is pure competition for the consumer's dollar. There are now more malls and stores competing against each other.
"They have discovered the best approach is to sell their inventory, and as a result there are some real values," he says.
That's what Allen is waiting for.
"I buy a few things now," she says, "but, I wait till the last minute, because my mother told me you can afford bigger gifts because the sales are bigger."
(c) Copyright 2000. The Christian Science Publishing Society