for the holidays
a weak economy, drooping consumer confidence and backed-up ports, retailers
try to be optimistic about the season they rely on for much of their
MARK ALBRIGHT, Times Staff Writer
© St. Petersburg Times
published October 20, 2002
is decked in holiday decorations. Sears, Roebuck & Co.'s Christmas
trim-a-tree department is open. At Wal-Mart, rows of red silk poinsettias
overlook a craft department with an aisle of fabric printed in Christmas
early jump on the holidays shows how retailers are pulling out the stops
to entice consumers to shop early and often this year.
face an uphill battle. For starters, there are only 26 shopping days after
Thanksgiving this year, six fewer days and one fewer weekend than last
year. Worse, experts say deteriorating consumer confidence, uncertainty
over war and growing fears about job security and pay cuts are taking
are getting more and more pessimistic," said Ken Rice, research director
for Leo J. Shapiro and Associates, a Chicago firm that tracks consumer
attitudes for several national chains. "For every consumer planning to
spend more on Christmas, there are two planning to spend less. That's
there has been temporary resolution of a labor lockout that shut down
29 West Coast ports jammed with freighters full of Asian-made Christmas
goods. While President Bush opened the ports by ordering mediation two
weeks ago, retailers are scrambling to get shipments to their stores in
time for the holidays. Officials estimate it will take up to eight weeks
to clear the backlog clogging the nation's cargo ports, trucks and trains.
More than half of the apparel, footwear, electronics and toys imported
to the United States comes through West Coast ports.
Florida merchants paid a premium to be sure goods arrive in time. But
they acknowledge some stuff won't make it and remain wary the dockworker
dispute will flare up again. "Things are moving out of the ports again,
but we still don't know how this thing will play out," said Edie Clark,
spokeswoman for the International Mass Retail Association, the trade group
for discount chains such as Wal-Mart, Target and Kmart, the nation's biggest
National Retail Federation is sticking with its holiday forecast of a
4 percent gain in general merchandise, apparel and home furnishings sales.
That would be milquetoast compared with a 5.6 percent sales gain run up
last Christmas in the wake of Sept. 11.
going to be a fairly weak Christmas," said Ira Kalish, chief economist
for Retail Forward, a retail consultancy in Columbus, Ohio, that recently
cut its forecast to a 3.3 percent holiday sales gain. "Housing and mortgage
refinancing are the only things propelling the economy right now, and
they are about to peter out."
think retailers will be lucky to get a 2 percent gain," said Britt Beemer,
president of America's Research Group in Orlando. "This is shaping up
as the worst holiday season since the Gulf War."
for a turnaround
had planned for a modest holiday all year. Inventories were reined in
to protect profits. But with the Christmas holiday season so critical
to retailers' annual performance, they can only cut back so far.
still optimistic about the holidays," said Monroe Milstein, chairman and
chief executive of Burlington Coat Factory. "I have to be because I am
a retailer. We're playing it aggressive because if we don't have the goods,
we can't sell the goods."
retailers depend on the holidays for up to a quarter of their annual sales
and half their annual profits in November and December. Jewelers, mail
order catalogs and online merchants count on the holidays for about a
third of their annual sales.
Tampa Bay area malls have been posting decreased sales this year thanks
to the economy, fewer tourists and new competition from International
Plaza in Tampa. They have been counting on the holidays to begin posting
positive numbers again.
still think there's going to be a turnaround by December," said Todd Putman,
vice president of marketing for Westfield America, which owns regional
malls in Countryside, Brandon and Citrus Park in the Tampa Bay area and
plans to boost its holiday promotion budget.
bellwether for the holidays is September. This year sales in September
turned more anemic than many seers expected.
the typical consumer household plans to spend $649 on Christmas presents
this holiday. But 89 percent intend to spend the same amount or less than
they did last Christmas, according to a survey of 7,700 consumers released
last week by BIGresearch.
will be seeing a very cautious consumer this year," said Phil Rist, vice
president of strategy for BIGresearch. "It will be up to the retailer
to give them a good reason to come out and shop."
essence, all retailers will be discounters this holiday season," said
Tracy Mullin, president of the National Retail Federation.
slashing to move unsold merchandise may be more restrained, however. "Inventories
are very lean this time, actually below last Christmas," said Carl Steidtmann,
chief economist for Deloitte Research. "So retailers don't face as much
pressure this time to discount deeper than promotional sale events they
allure of the new, old
think some emerging trends will help. New fashion fads are getting traction.
While no red-hot new toy has emerged, there are plenty of nominees.
Toys "R" Us, the latest $19.99 version of Tickle Me Elmo does the chicken
dance, a $79.99 wooden doll house comes furnished in Laura Ashley fabric,
and a $14.99 Spider-Man Web Blaster Glove squirts a sticky substance.
Some think Yu-Gi-Oh collectible cards will make kids forget Pokemon.
tailored clothing sales are up 12 percent ahead of last year, says NPD
Group. So retailers hope sale prices will prod more men to forsake casual
wear at work. It's one reason JCPenney is heavily promoting a new type
of wrinkle-free cotton dress shirt priced at $37.50. A sea of neckties
is getting more prominent display in many stores.
Avenue is eager to bring back the 1970s among women too young to have
experienced them. Earth tones such as brown, rust and barn red are selling
briskly. So are hooded sweat shirts, macrame belts, Bohemian/peasant style
blouses and twill pants.
Navy, which used The Brady Bunch to push rugby shirts in September, has
revived the corny Green Acres TV show for ads promoting its baggy painter's
pants. Adidas and K-Swiss are recycling their athletic shoe styles of
the 1970s as "classics." "We're carrying Puma shoes and apparel for the
first time since 1980," said Conrad Szymanski, president of Beall's Department
stores are trying new ways to compete with discount stores. At Sears and
JCPenney, customers will find central checkout counters and shopping carts
that double as baby strollers.
groups have told us that some people prefer the convenience of shopping
the whole store and checking out once," said Carey Watson, Burdine's vice
president of marketing.
ahead for lockout
West Coast port lockout came as no surprise to retailers. Most had been
mapping contingency plans since May.
retailers expedited shipments to arrive before the lockout. Others jammed
East Coast ports by diverting shipments that could fit through the Panama
Canal. Others used pricey air freight to deliver items needed to make
good on advertised deals scheduled for early in the season. Still, there
are spot shortages.
lockout is over, but we're still not sure how quickly product flow will
be restored," said Glenn Richter, chief financial officer of Sears.
been worried about what the lockout would do the American economy as well
as to our inventory shipments if it went beyond two weeks," said Tom Williams,
a spokesman for Wal-Mart Stores Inc. "We're happy they re-opened the ports.
But it's going to be a few weeks before things get back to normal, and,
hopefully, shoppers will not notice the difference by Christmas."
are being unloaded, however, with priority to perishable foods and goods
destined for the military. There's also a shortage of chassis needed to
drive the semitrailer-size containers to retailers' warehouses.
large number of loaded containers tied up also created a shortage of them
back in Asia where goods retailers will need to restock empty shelves
the week before Christmas are waiting to be loaded.
are complaining about price gouging by shippers that will erode their
profit margins. Normally containers sit waiting to be unloaded for up
to a month. To get them emptied faster, some shippers are levying daily
penalties on containers that sit at retail warehouses.
freight sends shipping costs through the roof. It costs Beall's 20 cents
to ship a shirt from Asia to its Bradenton distribution center. Air freight
inflates the cost to $1.50 a shirt. The company has been confronted by
some shippers wanting as much as $3.
shippers are trying to take advantage of the situation," Szymanski said.