Nov 2, 2009 6:43 pm US/Central
Retailers Prepare For Slow Season
ROSEVILLE, Minn. (WCCO) ―
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Midwest business leaders expect holiday sales to drop 1.6 percent this year, on top of last year's dismal showing.
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Just as economic indicators show we're beginning to climb out of the recession, Minnesota's retailers are bracing for yet another slowdown in holiday spending.
It is in line with the results of two major surveys that measured the sentiments of the nation's shoppers.
Midwest business leaders expect holiday sales to drop 1.6 percent this year, on top of last year's dismal showing. Meantime, the National Retail Federation survey predicts the decline will be slightly less at about 1 percent.
Consumers might recall last holiday season when many stores and chains were caught off guard by the nation's deepening recession. Many were forced to unload huge inventories at deep, deep discounts when shoppers weren't shopping.
However, that won't be the case this year because retailers are adjusting their holiday inventories with the expectation of another slow season.
Window displays at Rosedale Mall are already trimmed for the holiday shopping season. Retailers are hoping to convince shoppers like Bridget Richardson to open their wallets.
"There's so many more things to spend money on, house payment and bills, that Christmas will have to come in second place this year," said Richardson.
It may well come in second place to the lingering recession. Although economists have said the recession is officially over, the subsequent recovery has a long way to go. High unemployment and low consumer confidence continue to drag down retail spending.
"So people are just nervous, so they're hanging onto those dollars," says Buzz Anderson, president of the Minnesota Retailer's Association. "It's not a surprise. It really reflects what happened in the last year when people were reluctant to part with their money."
All retail sectors are expecting a slight dip in sales this season. However, unlike last year, when unsold inventories were slashed to move, retailers are anticipating slower sales and are making adjustments.
Rollin Hunsicker is general manager at Rosedale Mall. He said the mall has added new stores and will pay special attention to shoppers needs. But a word of caution goes out to holiday procrastinators: shopping early will never be more important. That's because most retailers will have a hard time restocking shelves of popular merchandise.
"There was a certain amount of proving that was done last year and lessons learned," said Hunsicker. "That has encouraged retailers to be that much more sophisticated in how they manage those (inventories) and promoting and merchandising their sales."
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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