Black Friday could be start of ‘Bah! Humbug!’ season for retailers

Challenging as it was for retailers during the last two years,the 2009 holiday shopping season may find U.S. consumers remaining cautious and not ready to spend like they did during better times.

Data suggests that while spending has increased, shoppers still are buying with a recession-minded approach.

The University of North Texas’ Terry Clower, associate director of the Center for Economic Development, said he has seen estimates “all over the place” projecting gains in holiday shopping; however, he expects another poor season.

“Anecdotally, the folks I’m talking to aren’t talking about spending more,” he said, referring to consumers. “I think we’re going to see another down year. I think folks are going to be very cautious.

“Obviously in Texas it hasn’t been as bad as other parts of the country,” he added, “but unemployment did creep up another tenth of a percent.”

The recession has separated the winners from the losers, and offered some unusual revelations, too, said Charles Wetzel, president and chief operating officer of Buxton Co., a Fort Worth customer analytics firm.

“I think there are some categories that have not only done well but done great,” he said, “and some that usually weather an economic downturn well have not.”

Discount retailers have seen positive numbers, as have specialty quick serve restaurants because rent rates have dropped allowing the eateries to move in to areas where they might not have been able to before.

“You see a lot of growth in burgers and things of that nature that are beginning to infiltrate all markets,” Wetzel said.

Health products similarly have done well.

“People are taking better care of themselves and they’re finding vitamins or supplements not only cost better from a medical standpoint but they feel good, too,” Wetzel said.

Ritesh Saini is an assistant professor in marketing in the University of Texas at Arlington College of Business. The retail industry has had a good year so far, he said, but the National Retail Federation expects holiday sales to decline 1 percent to $437.6 billion, compared to 2008’s 3.4 percent drop in holiday retail sales.

“[Holiday shopping] is going to be about 1 percent down or up, not much different than last year,” Saini said. The number of people going to stores will be up, but their shopping baskets probably will be lighter, he said.

Retailers likely will have to wait another year for a return-to-form in a shopping sense.

Big-box retailers rolled out the deals for Black Friday; Target offered $3 appliances, Walmart slashed prices on DVD players and televisions and Staples took 20 percent off a Dell laptop – all in the attempt to lure U.S. residents back to their shopping ways.

Even so, people will purchase fewer and less expensive items during the holiday season, Clower said.

That fact is best explained by a rodent.

A Zhu Zhu is a sort-of toy hamster. It’s robotic, makes noise and moves around. It’s a big deal for children going into the holiday shopping season, and it sells for $9.99 – a clear sign that recession-minded spending continues, Clower said.

“It’s been a long time that we’ve had a really hot toy that’s been sub-$10,” Clower said.

It has been a rough two years. Stock in publicly traded apparel retailers, for example, dropped as much as 70 percent from mid-2007 to the 2008 winter shopping season. Shares have rebounded in 2009, but the sector still is down about 34 percent since the economic downturn began.

Retail Forward Inc., a Columbus, Ohio-based retail consulting and research firm, recently reported that same-store sales increased during October for about 30 retailers, although shoppers remain cautious: seeking deals, limiting spending and trading down among brands, according to November data.

Only 7 percent of shoppers polled plan to spend more this year on holiday gifts than the previous year, Retail Forward reported.

“I think [retailers are] cautiously optimistic for the fourth quarter. I think the companies that have already finished the restructuring are ready to get this year behind them,” Wetzel said. “The ones that survived are going to come out better for it.”

Retailers hope for a turnaround, but Clower said, “It’s going to be more ‘Bah! Humbug!’ than ‘Ho, ho, ho’ this year.”

 jtronche@bizpress.net