Holiday sales may be in for slowdown

Experts expect important retail holiday sales to plummet alongside the economy this year, and tiffany key rings local sales might drop, area stores should not be wounded as badly as national stores.

“We’ve not been hit as bad as other areas,” said Rick Shannon, marketing department chairman and associate marketing professor at Western Kentucky University. “It’s not as bad for local markets as national markets.”

The National Retail Federation reports this year’s holiday sales will be the lowest in six years; experts say national sales will grow 2.2 percent, or $470 billion, during the holidays. The usual holiday sales increase is 4.4 percent.

The problem lies in consumers’ shattered confidence in the economy. And if a possible government bailout doesn’t boost that confidence, retailers might be fighting a losing battle, Shannon said.

“That’s the problem,” he said. “It’s a confidence issue.”

A favorite tactic retailers use to lure customers through the doors is price cutting.

Managers usually slice price tags a week before Christmas, but many will heavily discount before Thanksgiving this year. Discounts might offset a national sales slump, but the more retailers discount, the less money they bring in, Shannon said.

“Sales won’t look as bad, but profits will be bleak,” he said.

JC Penney staff in Bowling Green recently met with sales officials to determine discounts for the tiffany necklaces season.

“We’re looking to gear up,” store manager Russ Dillingham said. “The holidays are one of our biggest selling seasons, and we’re taking that very seriously.”

The department store generates a lot of revenue from last-minute shoppers. Dillingham said he expects this year’s sales to be lower than past sales, but managers are holding onto hope until the end of the season.

“With the way sales have been, people have been saving up for that,” he said. “So, it might surprise us all. (Sales) might be stronger than what we’ve been seeing. We’re optimistic.”

The local Target department store might cut back on holiday stock inventory, such as Christmas decorations, said Bob Irizarry, executive team leader.

“I think that if there is a way for consumers to save money by going into the attic and pulling down the old tree instead of buying a new one, they’ll do that,” he said. “I’m sure companies don’t have as much revenue to spend on those things.”

The bulk of Target’s holiday revenue comes from Western Kentucky University students, who venture to the store in search of holiday gifts, Irizarry said.

“It’s going to be tough, but I think consumers look forward to the holidays,” he said. “I think they’ll spend.”

Morris Jewelry on Main Avenue plans to coordinate a holiday kick-off event with other downtown shops. The tiffany accessories store will have an open house, which will feature holiday decorations, refreshments and later store hours.

“We try to coordinate so people who come down can come and go to many different places,” owner Michael Barron said. “Downtown is a destination. It’s not something you drive by casually.”

Vicki Bond, co-owner of Candle Makers on the Square, said her location — on Park Row — as well as the dwindling economy might hurt sales this season.

“Our problem down here is nobody knows we’re here,” she said.

Bond has been forced to raise prices because her suppliers have boosted costs.

“I’ve raised my prices five percent,” she said. “But it’s not offsetting (the amount of money) I’m out.”

Bond, who sells candles and fills empty containers with candle wax at a reduced price, said she doesn’t usually discount during the holidays, but she is expecting to sell new products and holiday scents this Christmas.

“It’s the biggest revenue,” Bond said about holiday sales. “That’s where we get our main revenue for the year. We’re tiffany to get fundraisers to sustain us in the off-season.”

Posted by admin   @   8 March 2010

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