Retailers facing bleak holiday shopping season - East Valley Tribune: News

Retailers facing bleak holiday shopping season

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Posted: Wednesday, November 26, 2008 7:47 pm | Updated: 12:11 am, Sat Oct 8, 2011.

Retailers normally are dreaming of a green Christmas this time of year as they brace for gaggles of bargain hunters wielding fists full of cash.

But polling data and industry experts say this year's holiday shopping season, which officially starts Friday, is sure to be far less lucrative, with consumer confidence dragged down by a constant stream of bad economic news.

"The buzz suggests that it's going to be brutal," said Dennis Hoffman, a professor of economics at the W.P. Carey School of Business at Arizona State University. "What's driving that right now is apparently an abysmal attitude on the part of the consumer. The economy is down, employment prospects are down (and) incomes have not grown dramatically, but it's the consumption pattern that's down far more."

Poll after poll has foretold a very austere holiday season for retailers and shoppers.

KAET-TV (Channel 8) and Arizona State University's Walter Cronkite School of Journalism and Mass Communication released a survey showing 53 percent of consumers said they would spend less this year than normal.

The Washington, D.C.-based National Retail Federation survey shows smaller crowds in stores and paltry sales gains of 2.2 percent to $470.4 billion - far below the 10-year average of 4.4 percent growth.

Other organizations paint a grimmer picture.

For example, ShopperTrak RCT, a Chicago-based retail research firm, predicted foot traffic dropping a record 9.9 percent from last year and a meager 0.1 percent increase in sales.

Hoffman said dropping gasoline prices and the end of a bruising presidential campaign were mitigated by news of falling stocks and housing prices and speculation of a possible recession.

As a result, retailers prepared for lagging sales by stocking less inventory, he said.

But at least one store manager remains optimistic.

Mark Ortega, assistant manager of Target at Baseline Road and McClintock Drive in Tempe, said spirits were high among managers at his store, who were preparing for large crowds.

"We're definitely hoping to be the same as last year," he said.

To lure shoppers, the retailer unveiled a host of dirt-cheap products, including $59 "Guitar Hero World Tour" video games and equipment. The regular price was $99.

The stores also are marking down 26-inch Westinghouse LCD high-definition televisions from $429 to $299.

Kohl's Department Stores, which open at 4 a.m. Friday, are cutting 50 percent off the price of its entire stock of toys, including popular brands like Fisher Price, Playskool and Barbie. Additionally, designer-brand clothes for women are 40 percent to 50 percent off their regular prices.

Wal-Mart, meanwhile, is promoting 32-inch Emerson LCD high-definition televisions for $388 and a Magnavox Blu-ray player for $128.

The Bentonville, Ark.-based company also is promising to match prices for identical products offered in its competitors' advertisements. It's also offering free shipping on Thanksgiving Day along with specials on electronics, toys and video games via its Web site.

Kathy Grannis, a National Retail Federation spokeswoman, said retailers are getting more aggressive with their promotions and sales this year.

And some in the industry are going beyond good prices to attract customers.

For instance, Bass Pro Shops at Dobson Road and Loop 202 in Mesa is coaxing customers by encouraging them to camp in front of the store tonight.Store employees also will offer s'mores and hot cocoa and carolers on Saturday.

SanTan Village center at Williams Field Road and Loop 202 in Gilbert will begin offering free horse and buggy rides Friday evening. Center officials also are planning a simulated snowfall in the children's play area.

Both events will run throughout December.

Tempe's Arizona Mills mall plans to get the real early birds by opening at midnight today, the earliest mall opening in the East Valley.

Bob Kammrath, a Phoenix real estate analyst, said the sales and promotions he's heard of this year ought to draw crowds of the same size as last year, but spending will be down.

He said if consumers pull back too dramatically "not only will you see closures of perhaps a couple of whole chains around the country, but you'll also see selective closing of stores by the chains that are still viable because they want to stay that way."

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