EDITORIAL: Retail Season Off to a Relatively Merry Start
Rick Bell
Shopowners must have let out a small sigh of relief as they pensively drove to their stores the day after Thanksgiving.
Like so many other things these days, there is tremendous uncertainty among retailers as the holiday shopping season gets under way. Store owners and managers especially have reason to be anxious, as they often bank on holiday shoppers to provide the lion’s share of their annual revenues.
Analysts have given a cautious thumbs-up to this year’s holiday shopping season. The dire pre-holiday predictions of empty stores fortunately have not come true, but it wouldn’t have come as a complete surprise if retail had taken a complete nosedive during the post-Thanksgiving weekend.
Among the positives: Sales were up from a year ago by 2.4 percent in the face of a now-declared recession, indicating consumers’ willingness to get out and shop. One of the benefactors was big-box retailer Wal-Mart, which posted a record single-day sales figure of $1.25 billion that Friday.
But at the malls of America, it was a different story. About 8 million fewer shoppers visited malls across the country, with department stores taking a particular beating.
Though total sales numbers increased, the amount spent over the weekend was off from last year by 4.6 percent. Consumers this year spent only $73.64, compared to last year’s figure of $77.18.
Despite the sagging number of shoppers at the malls, executives can point to the 36.5 percent increase in customer traffic from the week ended Nov. 18 to the week ended Nov. 25. A year ago , certainly a robust economic time , the same weekend-to-weekend increase was 34.5 percent. This year’s figures also exceed the numbers from 1999’s holiday season, which by most accounts was a great holiday for retail.
Considering the current political and economic climate, the traffic numbers could have been a lot worse. The numbers may even indicate a ramping up by consumers who are willing to wait to do their shopping.
For the momentum to continue, retailers will likely have to cut their prices even more. With barely enough time to make emergency adjustments to staffing and inventory in the wake of the Sept. 11 attacks, most retailers likely have their contingency plans in place and will have to ride out the volatility until consumers’ anxiety eases a bit.
Though steep discounts ultimately will drive sales this holiday season, they likely will dampen most retailers’ bottom line when all is said and done. But after the first week of holiday shopping, enough indicators point toward merchants enjoying a subdued but merry retail season.
, Rick Bell
