Thanks to USA Today for the headline thought.
We reported in this week’s “Notable Quotes” column that most analysts thought the “jury was still out” on the 2011 retail Holiday selling season. Hard numbers will not be out officially until January 12th.
The latest estimates from the national Retail Federation, over a week old, are forecasting an increase of +3.8% vs. 2010, up from their initial estimate of +2.8%.
IHS Global Insight Research is predicting an increase of +4.9% on a bit more recent data, but caveats that with the note that they believe over one half of the increase will be due to higher prices, despite the much-publicized deep discounting this season.
Most analysts are pointing toward a 10-14% uptick in online sales this season, but that has come with some issues as some well-known retailers have had problems with delivering on their online sales and delivery promises, most notably Best Buy.
We also have headlines Tuesday about Sears Holding talking of closing over 100 Sears and Kmart stores. In an internal memo Tuesday to employees, CEO and President Lou D'Ambrosio said that the retailer “had not generated the results we were seeking during the holiday."
We also have reports of yet another new shopping designation by the media, this one being “Mega Monday” or Dec. 26th. It is expected to be the third busiest shopping day of the year after Black Friday and Friday Dec. 23rd. According to Consumer Reports, 4 of 10 Americans have plans to shop over the next few days, cashing in gift cards and being drawn in by discounts ranging from 50-80% off.
Just for fun, here is my own personal Holiday season anecdotal shopping evidence:
- I spoke to the CEO of the Northeast’s largest Christmas tree retailer (and largest “dairy store” in the U.S.). He said sales of Christmas trees were at least as good as last year but many
folks were downsizing their tree size
- The owner of the largest, busiest and best bakery in our area told me that Holiday sales were better than last year but nowhere near his heyday of several years ago.
- I made my one and only trip to the mall to pick up “stocking gifts” at Target on Christmas eve afternoon and had absolutely no problem parking, which was extremely unusual as usually on the
day before Christmas have to park on the grass somewhere a half mile away. (By the way, our idea of stocking gifts now is health and beauty aid products, batteries and maybe one favorite candy
bar per family member..boring!)
- Our airwaves are inundated by year-end luxury auto dealer lease deals, although have to say that is usually the case this time of year
- We went to a Marshall’s for some truly last-minute inexpensive clothing gifts and found a check-out waiting line of over 20 minutes…the longest we have ever seen.
- Also went to a Sears outlet which sells returned and “scratch and dent” appliances and other major items which seemed to be doing a brisk business (our 15 year-old refrigerator of course picks the Christmas season to finally give out...but we got a fantastic deal on a new one with one minor scratch.)
Our personal conclusions, which should not be surprising: folks did about their usual Christmas shopping as the past couple years but looked for the best deals possible and took the time to shop for them. From what we saw and also read, we suspect the discounters and the high-end retailers likely did the best, with more mid-stream retailers having to cut very deep deals and that may impact profit outlooks when all is said and done. Strong “exclusive’ non-discounting brands such as Apple and North Face likely did their usual stellar Holiday sales. All signs would seem to point toward a relatively decent season, but not over the top by any stretch. We continue to question the mania of extended shopping hours for the major retailers, which seems to us to just increase operating costs while likely not adding any net new sales to the overall Holiday shopping season.
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David W. (aka The Underground Trader)
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Comments
thanks Tom..would be interesting to here form others around the country...what did you see this season in terms of shopping patterns, traffic, parking, sales, etc.? (by the way, shopping for a major appliance something we have not had to do for many years since we put in all new stuff when we moved into our home some 15 years ago! my wife is quite the shopper and we must have visited the Sears outlet 4 times as they are continually getting in "new" open box stuff....now, we would never buy a fridge which was actually used by someone else, or one with dents the size of golfballs, but some are returned with the most minor of damage which occurs during delivery and some returned with some relatively small malfunction which is then repaired..so we thought buying a brand new, still had the protective wrapping inside $2500 LG french door, bottom freezer top of the line fridge for $1250 was well wortth the effort!)
We noticed a lack of crowds on Christmas eve saturday at the Mall of America in Minnesota also. Usually saturdays are crowed, with parking either on the roof of the ramp, or overflow lots. Parking was available near the doors, and about 1/3 the usual number of shoppers.