Central Valley stores eye winter sales


There’s a chill in the air around Central Valley malls and shopping centers, but you can’t blame this cold front on the weather. With economic forecasts predicting the worst holiday shopping season in more than a decade, retailers are using innovative measures to unfreeze consumer spending on the heels of the biggest financial crisis in a generation.

Area retailers are cutting inventory, hiring fewer seasonal staff and ramping up marketing campaigns all in an effort to reduce the affect national economic concerns will have on the all-important holiday shopping season that runs from the end of October to late December.

“We’re really feeling it,” said Al Dean who has owned a Hallmark store in Tracy for more than five years. “People just aren’t spending like they normally do.”

Sales on everything from glittery Christmas tree ornaments to musical greeting cards have remained well below previous years, he said. Dean is predicting his sales to drop by as much as 35 percent compared to last year.

“Things are going to be down fairly significantly for December,” he said.

Like many retailers facing tightening consumer purse strings, Dean has had to adapt to draw customers. Some techniques he is using to entice shoppers through his doors include phone calls to preferred customers, special sales and discounts and holiday open houses.

Consumer confidence has plummeted in the face of higher joblessness and increasing constraints on credit, according to Jeffrey Michael, Director of the Business Forecasting Center at the University of the Pacific Eberhardt School of Business.

“We anticipate this is going to be one of the worst shopping seasons in a long time,” he said.

Though consumers will get a break on gas prices this year, down by more than 38 percent this over last year’s record highs, Michael said it won’t do much to stir exceptionally skittish shoppers to spend.

Retailers have been preparing for a spare holiday season for sometime, according to Michael, and many have been planning accordingly.

“They’ve seen this coming,” he said. “Retailers have had time to plan.”

Retailers are taking steps such as lowering inventories and hiring fewer seasonal staff to help with the holiday shopping rush.

But not all local retailers are predicting a gloomy December.

“The news media would have you believe there isn’t going to be a Christmas this year,” said Lisa Whirlow, owner of Nutcracker Sweete, a store that offers gift baskets, candies and candles for special events.

She saw a flood of customers at her shop in Lincoln Center during a recent Christmas open house. Whirlow has operated businesses in the Central Valley for more than 30 years and is trying to put the shopping freeze into perspective. She said that her outlook for this year has improved considerably, but she, like most small business owners, remains anxious about what the economy has in store.

“We’ve been through a recession before, but this has been probably one of the most difficult years,” Whirlow said. “We’re banking that the economy is going to get better.”

Consumers are expected to spend an average of $832.36 on holiday shopping this year, according to a study by the National Retail Federation. This represents a 1.9 percent increase over last year, the smallest increase since the study was commissioned in 2002.

October, the traditional start of the shopping season, was a particularly rough month for stores, with high-end retailers suffering the most. Target Corp., Macy’s Inc., and Gap Inc. all saw their sales fall sharply as consumer spending dried up in the face of the financial crisis. Talbots and AnnTaylor Corp. both fell in trading after announcing they would cut spending. Saks Inc., reported declines in sales of 17 percent while Neiman Marcus Group Inc. fell 27 percent. Nordstrom Inc., Kohl’s Corp. and J.C. Penny Co. all cut projected profits as well.

Target spokesperson Hadley Barrows said the retail chain plans to focus on bigger discounts to attract consumers.

The solitary silver lining amid the gloom of miserly holiday shopping predictions was cast over Wal-Mart Stores Inc. The discount retailer posted sales increases of 2.4 percent, exceeding its projections, according to Wal-Mart Spokesman John Simley.

“There are a lot of economic challenges out there for people,” he said.
A report by Standard & Poor’s offered a sober vision of end of the year sales, saying nationwide sales will remain at $255 billion or, more likely, will fall two percent.

The National Retail Federation had more upbeat expectations for the crucial Christmas shopping spree, predicting a 2.2 percent growth in retail sales.

Same-store sales in October fell an unprecedented 0.9 percent, the biggest drop since data began being collected in 1969, according to the International Council of Shopping Centers. Sales will likely climb a mere 1 percent, far less than the 1.7 percent the trade group had initially forecast. The fall was particularly significant given that October usually represents the start of the holiday shopping season.


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