Oct 26, 2008

Retailers hope sales, promotions will convince consumers to get into the holiday spending spiritBy Jenni MintzVenturaCountyStar.com

It’s a buyer’s market on the retail scene as stores focus on promotions, service and inventory to fatten up scrawny sales.

Unsettled by shaky consumer confidence and foundering economy, retailers need a strong holiday season to regain solid footing.

It doesn’t help that a later-than-usual Thanksgiving shortens the traditional holiday shopping season, adding more pressure for retailers, which rely on the holidays for up to 40 percent of annual sales and up to 75 percent of all profit, according to the Purdue Retail Institute.

“Given today’s economy, it’s more important than ever that they’re on top of their game,” said Ken Gillett, senior vice president of property management at Macerich Co., owner and operator of major retail properties. He said he expects the addition of Target at Pacific View mall in Ventura and Nordstrom at The Oaks in Thousand Oaks, both Macerich shopping centers, to boost overall business.

Despite stepped-up sales and promotions, it could be a dreary winter for most retailers, with the possible exception of discount stores. Citing the financial crisis that is gripping the country, major chain stores posted a 1 percent increase in same-store sales in September, the slowest growth for any September since 2001, according to the International Council of Shopping Centers. The organization is forecasting sales to increase 1.5 percent to 2.5 percent in October, and 1.7 percent in November and December.

The National Retail Federation is a little more optimistic, projecting a moderate 2.2 percent sales growth to $470.4 billion for November and December from the same period a year ago, which would be the slowest growth since 1.3 percent in 2002. That’s a far cry from the heyday of 1999, when holiday sales grew 8.1 percent.

“This is not going to be the season for big-ticket items,” said Michael Niemira, chief economist at the International Council. “It will be a season of basics, value and smaller purchases.”

Worried about plunging home values and their jobs as unemployment rises, consumers are not feeling the holiday spirit, said Kathy Grannis, NRF spokeswoman.

While shoppers will stick to their budgets more this year, she expects retailers to try to win them over with special offers. Clean stores, customer service and attractive incentives are important, she said, but “everything will take a back seat to price this year.”

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