Google Plus Facebook LinkedIn Twitter Vimeo RSS

Midstate retailers can expect deal pressure for holidaysA 4-percent holiday sales uptick predicted while people are still tight with cash

By ,

Pretty much all many people really care about are extreme deals at the holidays, even in shopping for themselves, as the “new normal” runs its course through the holiday shopping season in a perpetually difficult economy.

And who better to give a sense of the value-oriented shopper than the value-oriented model in the industry?

"People know Black Friday is synonymous with holiday savings," said Chuck Simmons, general manager of Tanger Outlets Hershey in Dauphin County and former general manager of the Tanger location in Lancaster County.

Simmons said there has been "continual, solid" growth in the past several years in outlet center sales, though he did not provide statistics. There are even product lines nowadays designed specifically for outlet centers as a more mainstream distribution channel, he said.

The upward trend is expected to continue this year, he said.

The predicted pickup in spending of about 4 percent nationally, according to the National Retail Federation, is laced with expectations that consumers will remain conservative with their wallets.

The outlook also includes interest in "self-gifting," or people buying for themselves, at record numbers and consumers overwhelmingly attracted to deals, according to the preholiday season survey the federation released last month.

The number of shoppers who say the state of the U.S. economy will affect their shopping is down about 10 points to about 52 percent, according to the federation.

The drop is indicative of consumers who have spent four years changing spending habits. The economy is a "new normal" and people have gotten used to budget living, cutting back on purchases that are not essential, using coupons and searching for deals, the federation said.

In deciding where they will shop, sales and discounts are still measured as the most important factors by more than 36 percent of consumers.

That compares with about 16 percent who value merchandise selection most and nearly 14 percent who put quality as their paramount interest, according to statistics released by the Washington, D.C.-based trade group.

Consumers are expected to spend the most through non-gift shopping in the survey's 10-year history, the federation said.

About 59 percent of consumers will spend an average of nearly $140 on so-called self-gifting.

People seeking the best price might not be news, but the extent to which they are treating the season as a way to save money on large purchases is a story of the season, said Britt Beemer, chairman, CEO and founder of South Carolina-based America's Research Group Ltd.

The idea that consumers could go out on Black Friday and get the best deal of the year on a 50-inch flat-screen television has grown legs, Beemer said. Consumers are now seeking these bargains on almost any large-ticket purchase, from big appliances to furniture, and smart retailers will be responding accordingly, he said.

It used to be that Wal-Mart and electronics stores ruled Black Friday, but now it is any store selling any items for more than $300, Beemer said.

The holiday discounting has become so entrenched that many parents have even shifted their back-to-school shopping purchases from late summer into the holiday season as a way to pay less for items needed through the rest of the school year, Beemer said.

A survey of parents for this past back-to-school period indicated nearly 40 percent planned to finish their shopping this way, he said.

At the same time, in this environment retailers will be in an increasingly tough battle to maintain sales margins with shoppers from after Black Friday until the last few days before Christmas, Beemer said.

In this period, stores are reluctant to offer deep discounts, but consumers are willing to wait to get a better deal, he said.

So a retailer might hang a 33 percent discount in the window and get only a few bites, leading the store to discount to 50 percent and give in to what consumers want, Beemer said.

That might not be as profitable, but the margin on zero sales ends up being zero, he said.

"It's going to be a bigger game of cat and mouse than ever before," Beemer said.

At the same time, small businesses are taking the path to holiday promotions and making sure they have less-pricey products in stock, said Debbie Ashway, owner at Futer Bros. Jewelers in York County.

Futer Bros. is among Pennsylvania businesses that have submitted information for promotion on the National Federation of Independent Business' page devoted to Small Business Saturday, a day dedicated to the "backbone of America's economy."

The jeweler learned about Small Business Saturday promotions before joining NFIB and used its recent membership as a springboard to participating, Ashway said.

If customers support community businesses, those businesses can support organizations in the local area as opposed to money leaving the region through online buying, she said.

Futer Bros. had its best December in the past four or five years during the last holiday season and hopes that will continue this year, though Ashway said the business has had to adjust by making sure it has stocked less-expensive products so "people can afford to buy a luxury."

Still, they haven't planned any big discounts or sales for Black Friday. If anything, a customer can find it to be the antithesis of the intense crowds and long lines at odd times of day, Ashway said.

"Our hours are business as usual," she said.

More From This Industry

Write to the Editorial Department at editorial@cpbj.com

Leave a Comment

test

Please note: All comments will be reviewed and may take up to 24 hours to appear on the site.

Post Comment
View Comment Policy

Comments

close
Subscribe to Our Newsletters!
Click Here to Subscribe for Free Now!