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October 16 , 2013

Holiday Shopping: HoHoHo or Ugh Oh

Holiday Shopping: HoHoHo or Ugh Oh

If the government doesn't act, consumer holiday spending may be in limbo. Here's an early gift of intel from The Retail Connection president Alan Shor. If you like it, bring him a present when he speaks at Bisnow's DFW Retail Summit on Oct. 22.
 
Shoppers will be cautious and retailers conservative for a number of reasons, including the inability of our government to govern, Alan says. Our elected officials need to resolve the budget and debt ceiling impasse so people can plan. The one thing that negatively impacts consumer confidence is indecision, he says. The NRF is projecting about a 3.9% increase in sales over last year, a modest increase, but when you look at year-over-year numbers, there has only been one with a sales decrease in recent years.
 
Assuming the government reopens and the debt ceiling issue gets resolved, the small sales increase will leave retailers wary. They're cautious about hiring. Last year, about 720,000 seasonal employees were hired. That should be about the same this year but could scale back if the season looks disappointing, he says. The mark downs will start earlier and inventory levels will likely be smaller. Retailers are being cautious about overbuying, so if the retail season is better than expected, there could be a shortage of goods. It's a better-safe-than-sorry attitude. (That's also why we don't drink egg nog at office Christmas parties.)
 
There are only 27 days between Black Friday and Christmas this year.That's fewer shopping days than 2012. And Chanukah starts earlier this year (think lighting the menorah while cooking the turkey on Thanksgiving). All of that means cramming more sales into fewer days. It's a bit of a gamble because some retailers can only run so many sales through their POS systems. Smart retailers will add more and those who don't may lose sales. How does Alan spend the holidays? A family trip to Longboat Key, Fla.
 
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