Retailers optimistic about holiday salesWritten by Justin R. Kalmes | | email@example.com
The weather outside may be frightful, but sales are expected to be delightful this holiday shopping season, local and national sources say.
The National Retail Federation predicts total holiday retail sales to increase 5 percent from last year, bringing spending for November and December to $457.4 billion. The gain is less than the one experienced a year ago as holiday sales in 2005 rose 6.1 percent to $435.6 billion, according to the NRF reports.
Despite the subdued forecast, local retailers say they expect retail sales in the Toledo area to be strong this holiday season.
“If the way our phone has been ringing is any indication, it’s looking promising for us,” said Casey Pogan, marketing director of Hill Partners Inc., parent firm for The Town Center at Levis Commons.
Pogan said gift card sales at the Perrysburg mall are up 77 percent on average per month this year, and she expects the trend to continue through the end of December.
“It’s been busy,” Pogan said. “The foot traffic is increasing and it’s not just necessarily on the weekends.
“We’re busy during the week as well.”
At the Westfield Franklin Park mall, retailers are also expecting a strong holiday season, said Marketing Director Sara Young. She said the shopping center has experienced increased foot traffic since the arrivals of holiday décor and Santa Claus earlier this month.
“Our customers seem to be welcoming that holiday atmosphere,” Young said.
According to the NRF’s 2006 Holiday Consumer Intentions and Actions Survey, the average consumer plans to spend about $800 this holiday season, up from $738 last year. The NRF attributes the spending increase to falling gas prices and rising consumer sentiment.
Retailers can expect one of the best holiday shopping seasons in recent years, according to International Council of Shopping Centers projections. The ICSC expects sales at general merchandise, apparel, furniture, electronics and other stores to increase 4.8 percent this year to $250.8 billion for November and December. Shopping center-inclined sales, the ICSC’s measure of industry sales based on U.S. Department of Commerce data, are expected to increase to $445.2 billion in 2006, up 5.2 percent from last year.
Though projections look good for retailers, consumers can also expect a favorable shopping season thanks to the world’s largest retailer.
Wal-Mart Stores Inc. announced earlier this month it would use price as a weapon to compete for consumer dollars this holiday season to make up for lackluster October sales and a bleaker November outlook.
The heavy price-cutting could prove problematic for other retailers, whose profits shrink along with prices.
The most vulnerable this season are likely to be Wal-Mart’s discount rivals including Target Corp., toy sellers like Toys “R” Us Inc., and electronic retail chains such as Best Buy Co. Inc., said Ken Perkins, president of RetailMetrics LLC, a research company in Swampscott, Mass.
“The news from Wal-Mart is definitely discouraging,” said Perkins. “They are going to be very price-aggressive. And it is going to have an effect on everyone. It is going to force other retailers to cut their prices, which in turn will squeeze their profit margins.”
Marshal Cohen, chief analyst at NPD Group Inc., a market research company in Port Washington, N.Y., says this holiday season could be as promotional as three years ago, when Wal-Mart spoiled the season by sharply discounting hot holiday toys below cost.
This year, “the consumer is going to be the beneficiary of all this nervous energy,” Cohen said.
The Associated Press contributed to this report.