Hoping for holiday cheer
Monday, September 29, 2003
This Christmas, those who sell the presents might be getting the best gift of the year.
A national retail trade group is calling for the biggest holiday sales increase in four years and some area retailers say they've already seen signs of life from customers who last year were holding tight to their pursestrings.
Despite rising unemployment rates, escalating energy costs and continuing anxiety about Iraq, the National Retail Federation is predicting sales in November and December to jump by 5.7 percent, to $217 billion, which would be the most spent since 1999.
"After several strong months of retail sales growth, it seems clear that the economy is picking up momentum just in time for the holidays," said NRF chief economist Rosalind Wells.
Holiday retail sales account for about 23 percent of total annual retail revenue, the federation said, and holiday sales in 2002 increased only 2.2 percent.
Wells cited low interest rates, low inflation, rising equity markets and mounting consumer confidence for the reason for the prediction by the association, which is the world's largest retail trade association.
Customers shopping in the Cape Girardeau area last week were on both sides of the fence.
"We're going to be spending more," said Joyce Blattel of Gordonville as she perused the fall decorations at Hobby Lobby last week. "They're putting it out earlier and we're buying it earlier."
But some customers thought that the prediction was being a bit unrealistic.
"Money's still tight for me," said Patricia Braxton of Cape Girardeau. "I'm probably shopping lighter this Christmas. People spend more? I doubt it. I've got to pay bills. I bet a lot of people are like that."
Dr. Bruce Domazlicky, director of the university's Center for Economic and Business Research, agreed that retailers in Southeast Missouri should see "a pretty good jump" in sales.
"The economy is definitely seeing signs of improvement," he said. "But 5.7 percent does sound a little optimistic to me. I think it will be closer to the 4 to 5 percent range. Even that would be outstanding based on what we've seen in the past couple years."
Domazlicky said economic growth continued to pick up in the second quarter, and he believes that will translate to boosted spending in the third and fourth quarters.
"It's hard to read what consumers are thinking, but it looks like they're a little more willing to spend more," he said.
Some area retailers have already seen improved sales.
"The way it's going right now, we're already there," said Hobby Lobby manager David Vaughn, standing amidst Christmas decorations that have been on the shelves for weeks. "We've been busier than we were last year -- we're 10 percent over last year."
Laura McGinty, the owner of McGinty's Jewelers in downtown Cape Girardeau, said she had every reason to believe the prediction would prove true in their store -- maybe even better.
"This is the best year we've ever had to date," said McGinty. "We've had steady increases -- 20, 30, 40 percent each month. If it keeps going, it should be awesome."
McGinty's has been in business for 23 years.
"It's absolutely fabulous," she said. "Every week, we look at the numbers and we can't even believe it. We're so grateful."
J.C. Penney manager Gary McDowell said August was great for them when the store saw an 8.5 percent gain. He said August, with its back-to-school sales, is a good indicator of Christmas sales.
"To me that's a pretty good sign we're going to be around the 5 to 6 percent range," he said. "The company feels pretty good about the fourth quarter."
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