Going into this holiday season, the National Retail Federation predicted sales would be up modestly over last year, thanks to an improving economy, job growth and lower gas prices. But consumers have confounded that prediction. Between Black Friday and Cyber Monday, they kicked off the gift-giving season by spending five percent LESS than they did last year. Now, retail analysts are trying to figure out what’s going on. Christian Gollayan reports.
Some analysts think the recent Black Friday numbers mark a new shift in Holiday spending habits. Take Manhattan resident Leslie Brown, who’s walking out of Bloomingdales on Lexington Avenue with a new pair of shoes for her friend’s birthday.
GOLLAYAN: Are you guys gonna be buying sales this season or are you guys gonna wait until later on?
BROWN: I’ll still probably end up waiting until after the Holidays, cause I don’t have a lot gifts to buy so it’ll all end up being for me, mainly. So I want it to be as cheap as possible. [00:08]
Analyst Pamela Goodman has a name for shoppers like her.
GOODMAN: “I think we’re really in the era of the smart consumer.” [00:02]
Goodman is from The Proper Insights and Trade Group. She says because stores have been offering promotions since October, people were more likely to avoid the busy Black Friday crowds since they already found their early bird discounts.
GOODMAN: Consumers know that retailers really offer some of their biggest discounts and deals closer to Christmas. I think a lot of consumers shopped early and we’re also seeing a lot of consumers hold off and wait and do their purchasing closer to the Holiday. [00:13]
But shoppers like Harlem resident Gina Diaz suggest a different explanation. She’s walking out of Time Square’s H&M store empty handed.
GOLLAYAN: How come you’re not spending anything?
DIAZ: I don’t have any money.
GOLLAYAN: How come?
DIAZ: Student Loans. You just gotta factor them in each month and you gotta make it work. [00:08]
Ken Perkins, president of Retail Metrics, says not everyone has cashed in on the improving economy.
PERKINS: The big issue for so many consumers is the lack of wage gains since the great recession. As a result that’s what’s been holding back retailers and why they haven’t been doing as well. [00:10]
Now, New York retailers may be better off than those in the rest of the country, according to Herb Kleinberger, who teaches retail strategy at New York University.
KLEINBERGER: Manhattan in particular is a unique market because of the influx of tourists that we have and the high percentage of tourist spending around the holiday season. There’s a disproportionate pop that NYC stores get compared to other parts of the country. [00:13]
While the retail group predicts a hopeful five percent increase in Holiday spending, Perkins and Kleinberger agree that number is closer to four percent.
Christian Gollayan, Columbia Radio News