Share this article

print logo

Stores expect green holidays Economic forebodings remain in background

The upbeat sounds of Christmas music, ringing cash registers and Canadian accents are filling the corridors of Buffalo-area malls.

But there's a background buzz of rising fuel prices, a troubled mortgage market and sagging economic confidence.

So what does this mean for holiday spending and retailers during the key buying season?

Nationally, predictions by experts and consumers are fairly bleak. But locally, the mood is optimistic.

"What are you gonna do? Santa Claus is gonna come no matter how high gas goes," said Valerie Stepanski. The Depew resident was ignoring negative economic news this week as she shopped her way through Walden Galleria in Cheektowaga.

Angel Marquez of the City of Tonawanda was employing the same holiday shopping philosophy in Boulevard Mall in Amherst.

"I'll probably wish I hadn't spent so much when our first really big heating bill comes, but right now I'm in the mood to buy," Marquez said.

The National Retail Federation, the nation's largest retail trade association, forecasts a 4 percent increase in holiday sales this year, to $474.5 billion. That would be the smallest gain in five years and a decrease from a 4.6 percent rise last year.

"Retailers are in for a somewhat challenging holiday season as consumers are faced with numerous economic obstacles," said Rosalind Wells, the federation's chief economist. "Consumers will be forced to be more prudent with their holiday spending."

The International Council of Shopping Centers expects a smaller increase of 2.5 percent.

Both national retail groups peg individual shopper spending at around $1,000, including gifts, decorations and entertaining. Apparel, DVDs and gift cards top the lists of planned purchases.

The Retail Council of New York State anticipates sales to increase 3 percent to 5 percent, with 78 percent of its members predicting sales will equal or surpass last year's levels.

But nobody appears to have told local malls and shops to reel in their optimism. Relatively unscathed by the subprime mortgage mess, buoyed by low unemployment levels and aided by a flood of Canadian shoppers, area merchants are nothing but positive.

"It might be wishful thinking, but I think we could beat last year by 10 percent," said James L. Soos, Walden Galleria's general manager.

He cited a "perfect storm" that includes a flood of new shops and restaurants in the expanded regional mall, plus a tsunami of Canadian shoppers.

"We're having an excellent 2007 and are already ahead of projections with the heaviest weeks yet to come," Soos said.

Armed with their strongest loonie in decades -- which peaked Nov. 7 at $1.10 (U.S.) -- Canadian shoppers have descended on Western New York malls and shops like never before.

At Fashion Outlets of Niagara Falls in the Town of Niagara, historically a cross-border shopping favorite, Canadians outnumber Americans on a regular basis.

"We're able to offer them brands that aren't available in Canada at outlet prices. It's exciting for them and is very good for our property," said Julie Clark, Fashion Outlets spokeswoman.

The outlet mall is anticipating a "very strong" holiday season that will outpace last year.

Area "mom-and-pop" retailers also are feeling confident of seeing plenty of holiday green. At Treehouse Toys on Elmwood Avenue in Buffalo, owner David Schueckler said he hoped to overcome economic malaise and the taint of recent toy recalls.

"People come in every day asking where our toys come from and how they can verify safety," Schueckler said. "That's only going to increase as we get into peak holiday season."

The independent toy seller, which gets some of its products from China but a majority from the United States and Europe, sees the recalls as a way to differentiate itself from mass market retailers.

"In a way, it's an opportunity to tell our story, while reassuring customers and selling toys," Schueckler said.

Ted Potrikus, spokesman for the state retail council, cites rising fuel prices as the biggest wild card for the state's merchants in the critical next six weeks.

"Even though gas prices have been at around $3 a gallon for a while, you are reminded of the cost every time you fill up," Potrikus said. "And everybody will get one or two heating bills during the holiday shopping season, so some consumers will pull back on spending."

The big question mark, for both buyers and sellers, is the timing of discounts, he said. It's no secret that merchandise prices will be slashed a few times between Thanksgiving and Christmas, but it's the "when" that has yet to be determined.

"To win the game, retailers can't cut the prices too early, and shoppers have to weigh the risk of waiting too long and not getting the item. It keeps things interesting," Potrikus said.

This year has 32 "official" holiday shopping days, the most since 2001. Because Christmas falls on a Tuesday, a last-minute surge of buying is expected as shoppers take four-day weekends leading into the holiday.

While "Black Friday," the day after Thanksgiving, frequently is billed as the biggest shopping day of the year, in recent years the largest revenues have been recorded within a few days of Christmas. And tens of billions of dollars will be exchanged between online shoppers and virtual storefronts on Cyber Monday, the new Christmas season milestone on the Monday after Thanksgiving.

Pointing and clicking is expected to account for $200 billion in holiday sales this year, up nearly 20 percent from 2006. Online retailers, like their bricks-and-mortar counterparts, will offer "door buster" sales, free shipping and free returns to capture a growing share of holiday spending.


There are no comments - be the first to comment