THE CAPITAL, TALLAHASSEE, Nov. 15, 2010 --
Increasingly confident shoppers and more sophisticated inventory control will combine to make the upcoming holiday season more joyous for Florida retailers who will fare better than their counterparts across the country, the head of the Florida Retail Federation said Monday.
Federation President and CEO Rick McAllister, who proved skeptics wrong last year by successfully predicting a rosier picture than most observers, said retailers could see gains of up to 4 percent for the holiday season versus last year compared to a 2.3 percent year-to-year boost predicted nationally.
Despite persistently high unemployment rates, McAllister said other factors have shown positive turns as consumers grow weary of belt tightening and are feeling more secure in their own financial situation.
“During the recession, Americans and Floridians began to reduce their debt and increase their savings which did damage to consumer spending,” McAllister said. “But what that has done for them now is that they are feeling economically healthier .... and are willing spend more than they did the last couple years.”
Last year, McAllister bucked most retail watchers by predicting modest growth in Florida sales of about 2 percent, a prediction that turned out to be true despite other dire predictions.
“Consumer confidence drives retail sales,” McAllister said. “And the most recent University of Florida confidence survey proves that out, showing confidence levels higher than they have been the past few years.”
The National Retail Federation said last month that it expects holiday sales nationally to increase 2.3 percent this year to $447.1 billion, slightly below the average of 2.5 percent a year over the last decade. Last year, national retail sales only ticked up 0.4 percent from 2008, and that year things were absolutely dismal with a 3.9 percent holiday sales decline, nationally, from 2007.
While things are looking up, national forecasters are slightly less bullish than their Florida counterparts.
“Though the retail industry is on stronger footing than last year, companies are closely watching key economic indicators like employment and consumer confidence before getting too optimistic that the recession is behind them,” NRF President and CEO Matthew Shay said last month.
Ken DeHart, manager of a JCPenny store in Tallahassee said he’s increased seasonal hiring by 20 percent over last year. At nearby Best Buy, store manager Ellis Hanks said his holiday hires are also up significantly in anticipation of more shoppers.
“We hired for the holiday last year (too), but we are optimistic of a very strong season,” DeHart said.
McAllister said consumers will see higher priced items in stores as merchants offer consumers more expensive items than have been offered the past few years. Jewelry sales are expected to post gains of more than 15 percent over last year while pricier toys are also expected to leave the shelves in greater numbers.
Internet sales will continue to cut into brick and mortar store sales, but McAllister said major retailers like JCPenny and others have ramped up their own Internet offerings including online purchase options for consumers who want to “shop in their pajamas.” Internet sales account for about 15 percent of all retail activity.
Most retailers rely on the Christmas season more than any other time of year. Last year, the $27 billion in sales that the nation’s department stores did in December represented a 45 percent increase from November, the largest month-to-month increase of the year, according to federal Census data. Among the sectors that typically see the biggest jump at Christmas time are book stores, which saw sales in December 2009 jump 98 percent over November, and jewelry stores, which saw a 135 percent month-over-month increase last Christmas time.
Meanwhile, nearly half of consumers say they’ve already started their Christmas shopping, according to AAA’s Annual Holiday Shopping Consumer Pulse Survey. The auto club survey found 45 percent of respondents said they have already started, and more than half – 54 percent – said they expect to spend the same amount of money as they did last year.
Still, the AAA survey found people will still be looking for some bargains, with 60 percent saying they’ll try to buy things on sale, and more than 80 percent saying they’ll hit the big chain discount retailers.
Tallahassee, Florida — Florida Retail Federation Release:
The halls—of the stores and malls—are decked with boughs of holly and ready for shoppers to find the perfect gifts this holiday season. It is no secret that the economic downtown has made the past few holiday seasons challenging for retailers as shoppers have been forced to be more practical with their gift choices. However, research indicates consumer spirits are on the rise. According to Rick McAllister, president and CEO of the Florida Retail Federation (FRF), the state’s retailers are expecting a three to four percent increase in sales compared to last year—exceeding the predicted national increase of 2.3 percent.
“Consumers are showing that they’re tired of being totally frugal, and that they plan on being a little more generous this year,” said McAllister. “I believe both consumers and retailers can look forward to a rewarding holiday season.”
One of the main factors driving this prediction for Florida is an upturn in consumer confidence. A recent study from the University of Florida shows that consumer confidence is the highest it’s been in six months. Consumers’ perceptions of their personal finances are higher than this time last year, and perceptions for improved personal finances a year from now are more positive. The report also indicates a large jump in the number of Floridians who think it is a good time to buy big-ticket items.
With the expectation for increased spending activity comes a stronger seasonal hiring effort from retailers. According to the Agency for Workforce Innovation, seasonal work added 30,000 to 40,000 jobs in Florida for 2008 and 2009. McAllister predicts that number to climb even higher for 2010.
“Throughout the recession, the retail industry has been one of the brightest spots in the hiring slump. Retailers provide one out of every five jobs in Florida,” said McAllister. “Just like Santa needs his elves, retailers need extra ‘elves’ to spread the holiday spirit. They’ll be hard at work helping consumers find the perfect gifts this holiday season.”
A return to discretionary spending is another trend bolstering McAllister’s much brighter outlook this holiday shopping season. The National Retail Federation reports that the number of people with jewelry on their wish list is up 13 percent from a year ago. More people are also asking for personal care or beauty items. Value is a priority for consumers and they will lean toward the product with the most value as opposed to the cheapest option.
“It’s not all about price this year. Consumers may not be spending like they did back in 2006, but research suggests that they will be shopping for higher-priced items that people want rather than simply need,” said McAllister. “A cell phone that costs twice the price, but has a higher degree of functionality is what will likely be waiting under the tree.”
No holiday season is complete without toys. Retailers over the past few years have made a conscious effort to focus on lower-cost toys to get volume sales. Following this year’s pattern of higher price-point gifts, kids are not wishing for bargain to mid-range toys. Hot items topping the Toys ‘R Us list include a $60 Disney Dance Star Mickey from Fisher Price and a $250 Ground Force Drifter go kart from Razor.
According to McAllister, the weekend prior to Christmas is traditionally the busiest shopping time of the year. However, he cautioned that if you are looking for the big sales this year you should not be a last-minute shopper.
“Retailers have better inventory control and know what will sell for full price. There will be fewer deep discounts, and they will come early,” said McAllister. “Black Friday happens every year for a reason. The majority of doorbusters and giveaways are set for that famous day after Thanksgiving, so don’t wait! Now…shop away, shop away, shop away all!”