Fearing a holiday letdown, retailers shifting strategies
It’s beginning to look a lot like Christmas at some of the nation’s stores, as retailers struggle to find ways to make shoppers forget about their battered 401(k) plans.
Neiman Marcus’ trees have been sparkling since mid-September, and Wal-Mart began opening its Christmas shops last week. But that hardly means many are in a holiday spirit: It’s all part of an effort to extend a holiday shopping season that some analysts say could have the slowest sales growth since the 1991 recession.
Consumer confidence — a measure of people’s attitudes about the current and future state of the economy and their own financial situations — had its biggest single-month drop in September since RBC Capital Markets began calculating its index in 2002. And this season, which brings stores most if not all of their annual profits, is likely to be a make-or-break one for many small retailers and those that were struggling before the economy’s dramatic slide.
So stores are doing all the cost cutting they can to preserve profit margins. For shoppers, that will mean fewer choices of merchandise as retailers trim what they have in stock. It also will mean fewer salespeople available to help shoppers. Meanwhile, many retailers are likely to have more and earlier promotions to try to lure people into stores. Wal-Mart (WMT) beat its own early start last year when it started holiday price cutting on toys Oct. 1.
“Things will appear to be similar,” says Richard Hastings, a consumer strategist at Global Hunter Securities. “Yet underlying those appearances will be a lot of caution regarding inventory, promotions, displays and advertising. Retailers know the consumer is not reliable right now.”
Social Connections
Problem displaying Facebook posts. Backup cache in use.
