Consumers heading out this holiday shopping season may need bigger stockings based on the numerous deals in what could be an indicator of a still fragile economy, industry experts say.
Retailers are matching competitor’s prices, reducing or eliminating layaway fees and having sale promotions well ahead of Black Friday. For example, hhgregg in Fort Wayne held an after-hours event last month with Black Friday-like deals.
At least two major retailers – Best Buy and Target – have pledged to match the online prices of Amazon.com and others through Christmas Eve.
Brick-and-mortar stores are miffed about customers using their establishments as showrooms only to go online and find the merchandise cheaper. So, matching online prices is in vogue this year.
To drive traffic and offer hope to some shoppers, Kohl’s will launch its Dream Receipt effort Nov. 23 through Christmas Eve. The program has the retailer picking up the tab for one winner in every store, every day. Kohl’s has more than 1,100 stores nationwide, including three in Fort Wayne.
Kevin Mansell, the company’s president and CEO, said in a statement shoppers are feeling cautious in the current economic environment.
No surprise there, said Michael Hicks, associate professor of economics at Ball State University, and director of the school’s Center for Business and Economic Research.
Many retailers are concerned that they are not going to get the sort of sales they’re looking for, which helps explain the aggressive promotions and sales. Personal incomes are shrinking, but that’s not going to change the mortgage or food bill. So, what it does is change your discretionary spending, and Christmas is a major discretionary spending period.
Toys R Us spokeswoman Katie Reczek said its decision to end layaway fees through the middle of December and match a competitor’s in-store prices is unprecedented. Nonetheless, Reczek said it’s just a way of showing we’re the destination for the hottest toys.
We’re giving our customers another reason to shop with us, she said.
Fort Wayne grandma Karla Brooks has five grandchildren she’ll be shopping for this season. Early sales and special offers suit her fine because she can’t deal with Black Friday chaos.
I don’t like being around crowds, said the 57-year-old. I don’t have the time to be out in all of that. I haven’t seen any really good deals yet.
But Brooks expects that to change.
Everybody is trying to beat everybody else’s prices, and I like that, she said.
Sally Taylor is the opposite of Brooks. The 35-year-old mother of four says she is a Black Friday junkie.
I don’t really get started until then, Taylor said. I haven’t seen a lot of good sales so far, but I’ll be looking for them.
According to the National Retail Federation, spending is expected to be conservative at best this holiday season. Matthew Shay, the group’s president and CEO, said shoppers are still recovering from the recession.
More than half of Americans will feel the impact of the economy, he said, and will compensate by doing what they’ve been doing for several years – looking for ways to cut any corners, comparative shop online and in stores more often and even planning to travel less or not at all.
The Retail Federation’s Holiday Consumer Spending Survey revealed that people are used to living on a budget, cutting back on non-essential purchases, and using coupons and searching for deals. The survey involved about 9,000 consumers during the first week of October. The consumer poll has a margin of error of plus or minus 1 percentage point.
The survey found that 52.3 percent of the respondents said the nation’s economy continues to affect their spending plans. Even so, that is down from 62.2 percent last year.
I’ll be out there shopping, Brooks said, but I’m looking for some deals.
At a glanceHere’s a look at consumer spending during the past 12 months:
Source: Bureau of Economic Analysis, a division of the U.S. Department of Commerce
Spending spreeHere’s a look at holiday shopping projections for the nation:
The average consumer will spend $749.51 on gifts, décor, greeting cards and more, up slightly from $740.57 in 2011.
Holiday sales will rise 4.1 percent to $586.1 billion.
The average person plans to spend $421.82 on children, parents, aunts, uncles or other relatives.
People will spend $75.13 on friends, $23.48 on co-workers and $28.13 on others, such as pets and community members.
Source: The National Retail Federation