Area retailers bracing for slower holiday shopping season

If predictions hold true, this Christmas season may be a bit less jolly for area retailers.

Store traffic inside malls nationwide could decline by as much as 9.9 percent and overall retail sales could see a record-low 0.1 percent increase, according to a retail industry survey released by Chicago-based ShopperTrak this week.

One reason is the slowing economy. Another is a shorter season: Last year, Thanksgiving fell on Nov. 22, compared to Nov. 27 this year, which eliminates one shopping weekend.

Bruce Domazlicky, director of the Center for Economic & Business Research at Southeast Missouri State University, said that while the day after Thanksgiving, called Black Friday, may result in strong sales, the rest of the shopping season could be weak.

"There is probably not much retailers can do except to offer incentives to get people to buy," Domazlicky said. "However, many retailers were anticipating a tough Christmas season and, therefore, have kept a tight rein on their inventories, which should mitigate damage somewhat."

AARON EISENHAUER ~ aeisenhauer@semissourian.comShoppers make their way between West Park Mall stores Thursday. Mall traffic nationwide could fall as much as 9.9 percent this holiday shopping season.

The Thanksgiving shopping weekend, from Friday through Sunday, accounted for about 10.1 percent of overall holiday sales last year, according to ShopperTrak.

Scott Thorne, instructor in the Department of Management and Marketing at Southeast, said early price cuts by retailers indicate a higher level of concern about sales through the end of December.

"I have seen projected figures for Christmas sales running from flat to as much as a 20 percent drop, which is extremely unlikely," Thorne said. "I expect to see Wal-Mart post a slight sales increase, simply because they have positioned themselves as the place to go for the lowest prices, no matter what the product is, and that is a very good position to have in the economy.

"Other stores, I fear, will suffer from being second choice -- 'If Wal-Mart is out of what I'm looking for or doesn't carry it, I'll go there.'"

Some retailers have already begun offering some of their best deals.

In early November, Kmart began offering electronics for up to 50 percent off the retail price. This week Dell.com offered its HDR-SR11 high-definition digital video recorder, retailed at $1,200, for $899.99. Target, Wal-Mart and Toys 'R' Us are among the many stores offering weekly price cuts on certain items.

David Overfelt, president of the Missouri Retailers Association in Jefferson City, Mo., said consumers should take advantage of such deals.

"We still think we'll see some slight growth over last year, but not a big jump like in the past," Overfelt said. "People will cut their budgets and look for bargains."

"The positive side will be more incentives than we've seen in years," he said. "We're seeing deals that now traditionally have been offered on Black Friday."

Tom Prendergast, manager of Target, said that while he believes his store may experience a decrease in sales, the number of shoppers should remain the same or even surpass the 2007 mark.

"A lot of people have been taking a wait-and-see attitude," Prendergast said. "I do think people have been cautious, but I've noticed that we've received a lot of foot traffic in our store."

Macy's manger Sean Connover doesn't expect the economy to slow down business either at his department store. He said customers are still searching for deals, such as the Charter Club cashmere sweater, which Connover expects to be one of the most sought-after women's items at Macy's.

"Given the circumstances, I think we'll do well because of our associates and loyal customers," Connover said. "I think everyone who has always shopped early in the past will continue to do so, and we'll have those last-minute shoppers."

West Park Mall management has added holiday retailers, including Glass Gallery, Hickory Farms, Auto Trim Design, Mystic Nights, Calendar Club, Su's Gift Shop and Rudolph & Me. The mall also is running promotions and involving community organizations in its holiday efforts. On Nov. 15, the mall unveiled its new candy-themed decor package, Santa's Candy Court.

Despite the predictions, one sector of the economy may give sales a boost.

Gas reached an all-time high of $4.117 per gallon July 17. By late October, gas had dipped below the $3 per gallon and then slipped below $2 a gallon Nov. 6. Gas on Thursday afternoon could be found for as low as $1.46 in Buckner, Mo., and $1.58 in Benton, Mo., according to gasbuddy.com.

"We shouldn't underestimate the savings that consumers are getting from the $1.80 a gallon versus 4 dollars a few months ago," Domazlicky said. "That has helped put more dollars in their pockets."

The Associated Press contributed to this report.

bblackwell@semissourian.com

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