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Holiday retail outlook: Local shoppers seek value, discounts

With Black Friday, the traditional start to the Christmas shopping season, drawing close, retailers are hoping for a little more jingle at the register this year.

But many store owners say they’ll be content with the same amount of holiday business they had in 2008, said John Heavener, president of the Georgia Retail Association.

“We are hoping that if we can come in this year somewhere flat with last year, we will be thrilled,” he said.

Most retailers rely heavily on the holiday season to make their bottom line. Holiday purchases represent from 25 percent to 40 percent of retailers’ total annual sales, according to a National Retail Federation survey.

Black Friday — the day after Thanksgiving — got that moniker because it’s traditionally the day retailers went from being “in the red,” or in debt, to being “in the black” or making a profit. Although it is not always the busiest shopping day, it was last year.

The Retail Federation is predicting 2009 holiday sales nationwide to be 1 percent lower than last year’s $442 billion. Last year’s holiday sales were down 3.4 percent, the first time in 16 years that sales had declined. For the past decade, average sales have increased 3.39 percent every year.

It comes as no surprise that the economy has been a prevailing theme this year, and 65 percent of Americans say the economy will affect their holiday plans this year, according to a retail survey. The majority of those consumers, or 84 percent, say they will adjust by spending less.

But consumers may be the winners this year.

“Prices will be as good if not better than ever because (retailers are) trying to get people in, and they are cutting their margins as much as they can,” Heavener said. “They are discounting to the bottom of where they can go.”

Julie Mayer of Macon said Thursday while shopping at Ingleside Village that she didn’t expect to change her shopping habits much this year.

“I do a little bit of both. I shop online and I try to shop locally because I like to support local businesses,” she said.

Mayer said she is going to try to spend less than last year, but that’s a challenge with two children to shop for.

“I am trying to be more creative and find less expensive things that they like,” said Mayer, who started her Christmas shopping about a month ago.

Nearly 40 percent of shoppers begin holiday shopping in November, and about 39 percent began before Halloween, the Retail Federation survey showed. The average amount spent on holiday gifts, food and decorations last year was $832, with $683 of that spent on gifts.

During the past few weeks, shoppers seem to be opening their wallets a little more, but they’re not taking out as much.

“Stores are getting foot traffic, but the purchases are just not there, and that’s reflected in the revenue numbers that the state’s reported,” Heavener said. “We are still not where we need to be.”

Grace Anderson, co-owner of the Ginger Michelle boutique at 466 First St. in downtown Macon, said customers are beginning to spend a little more.

“I think definitely Christmas won’t be as good as the past years, ... but I do think it will be better than the rest of the year has been,” Anderson said. “I think people hopefully will get in the Christmas spirit and start buying more things.”

Some of the things shoppers are buying for Christmas in her store are scarves, jackets and candles, she said.

“We’ve wrapped a lot of presents already,” Anderson added.

To help draw customers in, Ginger Michelle has an in-store calendar of sales it’s offering until Christmas Day, she said.

Many stores, which have already been offering discounts and sales to bring in customers this year, are expected to ramp it up for holiday shoppers.

“It’s been a very aggressive year for retailers because shoppers as a whole aren’t buying unless it’s an item on sale,” said Brian Olivi, manager of Macon Mall. “That trend has continued throughout the year, so it’s more of a continuation. We’ll probably see more advertising of the specials.”

The Shoppes at River Crossing in north Bibb County is expecting to do better than last year, due in part to at least five new stores opening since last Christmas, said Bill Baker, senior general manager. Dick’s Sporting Goods, Gap, Charming Charlie and Dress Barn have opened this year, “so we are looking forward to an even stronger overall holiday than we had last year.”

Although Wolf Camera closed after the company went bankrupt, a new store called PeachMac opened Saturday in the same space.

“Our sales have been trending up compared to last year and they should be,” Baker said. “The whole merchant mix is a little bit more solidified than during the holidays last year.”

ELECTRONICS LIKELY TO BE HOT TICKET

Electronics have sold well all year, and there is no reason to think that’s going to change, Heavener said.

“Big box electronic stores have done well this year despite the economy,” he said. “I think we’ll see TVs do well.”

Shoppers plan to spend an average of $222 each on consumer electronics this holiday season, an increase of about 8 percent from last year, according to the Consumer Electronics Association.

“I think we’ll see cutbacks in things like clothing and home furnishings, and to some degree toys,” Heavener said. “I think the conventional department stores are going to have to work really hard this year to make it go.”

Retailers don’t want to have too much inventory left over after Christmas, so they are ordering less this year, according to both state and national retail organizations.

“Everybody’s cautious about what they are stocking, Heavener said. “A number of small retailers depend on credit to purchase their inventory and they can’t get credit right now and some items, toys especially, will not be as deeply stocked.”

What this will mean is that some stores may run out of popular items before people have finished shopping.

Olivi said concerns about inventory levels was “the only negative” to come out of a conference call recently among the mall’s corporate office and other shopping center managers.

“The economic indicators ... seem to indicate that they feel there will be better traffic and more purchasing going on compared to last year,” he said. “They don’t have a finger on the pulse of the retailer to know what level of inventory they will be carrying, but all indications are that the purchasing would be in greater numbers than it was last year.”

Another indication is that shoppers will remain focused on “value-oriented items” he said.

“I don’t think you will see splurging,” Olivi said. “It will be a need-type Christmas. It will be a value-type Christmas. If retailers are aggressive and properly advertise ... it will pique the shoppers’ interest. I strongly believe it will be better than last year. However, it will not be over the top.”

Florence Allen, owner of William’s Store, said even though she has had an increase in sales every month this year compared to last year, she’s cautious about what the holidays will mean to her toy store in Ingleside Village.

“What November and December will do, I’m taking a wait-and-see attitude,” Allen said.

The store, which moved earlier this year a few doors down into a larger space, carries educational toys, games and puzzles.

What happens from now until Christmas is critical to Allen.

“For the last two years, November and December sales can make up 50 percent of my annual sales,” she said.

Stephen Bashinski, owner of Bashinski Fine Gems & Jewelry on Riverside Drive in Macon, is fairly optimistic about Christmas this year.

“I haven’t been this optimistic in a year and a half because our traffic flow started picking up like it used to back in August,” Bashinski said. “Things are getting back to where they used to be. ... If you had asked this question nine months ago, it would have been a different story.”

The jewelry store recently added on to its building, which triples the size of the area where it makes about 98 percent of what it sells, he said.

“There’s a lot of buying power out there with your money,” Bashinski said. “Our client base is still optimistic, and they are still buying. They may be buying differently, but they are still buying.”

To contact writer Linda S. Morris, call 744-4223.

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