Share this article

print logo

Don't count retail out: Why stores expect more foot traffic for the holidays

If you're waiting for the holiday shopping season to start, you're late.

It's already in full swing.

Sure, Best Buy, Walmart and Amazon offered Black Friday sales in July, but sales and consumer foot traffic began their annual increase in earnest last weekend, well before Black Friday's symbolic kickoff.

Despite reports of brick-and-mortar retail's steady drop-off and hastening demise, things are looking up again this year, with indicators that can predict such things trending positive: consumer confidence, holiday hiring, the economy, unemployment and projected spending.

Even tariffs on Chinese products aren't likely to dampen enthusiasm: Retailers imported a record amount of merchandise before the tariffs took effect in September as part of a strategy to head off price increases.

Stores may never again be as packed as they were when brick and mortar was king, but the numbers show parking lots and stores are likely to be busier than they have been in years past.

Consumers say they expect to spend more money on the holidays this year, according to a survey by Proper Insights & Analytics for the National Retail Federation. Spending expectations are up 4.1 percent from last year, with consumers saying they will spend an average of $1,007.24, compared to the $967.13 they anticipated last year.

Overall holiday retail sales are expected to increase, too, according to the National Retail Federation's annual forecast for November and December's retail sales excluding automobiles, gas and restaurants. The NRF is predicting an increase ranging from 4.3 to 4.8 percent over last year, totaling anywhere from $717.45 billion to $720.89 billion.

Other projections are higher. Much higher. Holiday sales could cross the $1 trillion mark for the first time ever, according to a survey by accounting and consulting firm Deloitte.

That's a lot of robes and slippers.

Seasonal hiring up

Over the past five years, holiday retail sales have increased an average of 3.9 percent annually, according to the NRF's calculations. Last year, the NRF predicted sales would rise 4 percent at most from 2016 to 2017. Reality surpassed that, with last year's sales increasing 5.3 percent – the largest bump since 2010.

Employment in the Buffalo Niagara market is strong, too. The unemployment rate is at 3.8 percent – the lowest it has been since at least 1990. That means many shoppers have money in their pockets and – with jobs plentiful – the stability they need to feel safe enough spending it.

Most customers said their financial situation is at least the same as (39 percent) or better than (43 percent) it was last year at this time, according to the Deloitte survey.

But numbers from the U.S. Bureau of Labor Statistics reveal another bright spot: despite more online shopping, brick-and-mortar retailers are still increasing seasonal hires. Retailers are hoping to add as many as 650,000 short-term holiday workers this year to help with the high-volume crunch through Boxing Day and into the beginning of 2019; a slight increase from last year.

Consumers confident

Consumer confidence is another biggie. When consumer confidence is low, shoppers hang onto their money and spend less. When consumer confidence is high, they spend more. It sets the tone for the entire season, making or breaking it.

Fortunately for retailers, shoppers are feeling optimistic right now. Consumer confidence is the highest it has been since the year 2000.

More than a third of shoppers have already started checking off their shopping lists, some of them as early as September, according to the NRF.

The uptick at area stores has been noticeable and encouraging for retailers.

"We are already seeing increased traffic as overall Black Friday sales are already active in a lot of stores or at minimum have been released," said Garrett Cleversley, CEO of MacSolutions Plus, a local Apple retailer.

The store has already beefed up inventory and started running its own specials to capitalize on this year's good mojo, which is bolstered by hot new Apple products like the iPad Pro and new MacBook Air.

But that early excitement doesn't mean shoppers won't wait for a deal, especially if it falls on Black Friday or later. More than 100 retailers have already released their Black Friday ads, including heavy hitters such as Walmart, Best Buy, Target and Kohl's; and 85 percent of shoppers said they are willing to play a waiting game for sales, according to the NRF.

In both the Deloitte and NRF surveys, customers cited price, discounts and freebies as their main purchasing motivations.

Thanksgiving comes early this year, points out Charles Lindsey, a marketing professor at the University at Buffalo School of Management. That gives consumers even more time to shop before Christmas, and retailers more time to discount.

"Expect to see more promotions and deals in general," he said.

There are no comments - be the first to comment