Rapaport Magazine

U.S. Retail Market Report

Happy Holidays Anticipated

By Lara Ewen
As the end of the year approaches, retailers are gearing up for a final big push for the holidays. Even though sales have been rising slightly throughout the year, numbers have been erratic, and many store owners and managers are counting on a strong December to fill out their bottom lines. With the election finally behind them, the overarching hope of retailers is that 2013 will represent a return to business as usual.

Present Expectations
But even before the New Year, retailers are optimistic that customers will come out for the holidays. “With the way the rest of 2012 has been, Christmas should be better than in 2011,” said Eric Wagner, co-owner of Showcase Jewelers, with three stores in Kansas. “This year has been exceptionally good. I think people are tired of not spending money, and people with money have decided to spend more. In 21 years, I’ve never had a bad Christmas.”

The holidays are also something Gail Friedman, owner of Sarah Leonard Fine Jewelers in Los Angeles, can count on. “Holiday sales come later and later every year, but I think customers are always going to buy for the holidays,” she said. “Christmas now is different than it used to be, though. We’re going to have all our holiday parties, but we have more trepidation, because it takes longer for people to come in. Customers are not in buying mode until ten days before Christmas, and that’s a new thing that we never had to deal with before. And even though we anticipate it, it gets kind of unnerving. But there’s always a Christmas, thank goodness.”

Even at stores where business has been slow, the end of the year looks promising. “We are expecting and have planned for a vigorous holiday,” said Curtis Bennett, vice president of retail operations at O.C. Tanner, with two stores in Utah. “Business has been good, but the biggest change is that our increase in 2012 has been much smaller than in the previous two years. We’ve seen single-digit growth versus very ambitious double digits.”

For some business owners, this year is presenting some new challenges that may end up making December sales more difficult, though not impossible, to capture. “We are expecting to do what we did in 2011, but we are cautiously optimistic that maybe we’ll do more,” said Amanda Coleman, assistant general manager at Nelson Coleman, located in Towson, Maryland, and serving the Greater Baltimore Metropolitan area. “We are running even with 2011, and not sure how the election results will affect our season. And as always, we wonder what marketing will work best for the season, considering internet competition is fierce.”

The election reaction and the impact of internet sales are also concerns for Perry Sporn, owner of Perrywinkle’s, with one store in Vermont and three stores in upstate New York. “Things are about 7 percent over 2011, and we’re pretty happy with that,” he said. “But I think there’s just not a lot of optimism out there, and there’s not a free-spending spirit right now.”

Sporn also has been challenged to step up his message because of competition from online stores. “We have to differentiate between ourselves and what they’re doing online. We have to give customers a compelling reason to get off their couches. We have to have the right product, and give them a good experience. Customers have to feel pampered, and they have to feel like they’re coming in to hang out with their best friends.”

New Year’s Resolutions
Looking ahead to 2013, expectations are moderate but optimistic. “2013 is going to be unpredictable,” said Friedman. “There will be amazing days and lousy days. I don’t know when it will settle again. But you do the best you can. I can’t control everything.”

Tanner also was hopeful — but realistic. “We are projecting the same moderate increase for 2013 as we saw in 2012, but we will work like mad for the double digits,” he said. “That’s still a distinct possibility in our minds.”

Others are more cautious. “Gold buying is drying up, and some of our improvement was off the gold buying, so we’re going to be up against some hard numbers in 2013,” said Wagner. “We’re going to have to find that improvement somewhere other than gold. I think 2013 won’t be more challenging, just differently challenging. And if the economy stays on track, then we’ll make up some of those numbers just in sales.”

For Sporn, 2013 will be better than 2012, but not great. “I think 2013 will show a slight improvement over 2012, but it’ll be a long time before things get back to where they were before,” he said. “We have generations that could become less wealthy. I’m not saying that will happen, but the potential is there. As I grow, I’ll have to find new ways to take a bigger piece of the pie.”

Article from the Rapaport Magazine - November 2012. To subscribe click here.

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