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November 23, 2009

Savvy Shoppers Seeking Bargains | Retailers Prepare For Holiday Season With More Discounts, Less Inventory

PHOTO/STEVE LASCHEVER Westfarms Mall shopper Lisa Rubensteine checks out sale items on display at JCPenney.
HBJ Photo| Steve Laschever A JCPenney store in Farmington's Westfarms Mall.
By Greg Bordonaro

Bargain hunters and savvy shoppers will likely be the type of customers most Connecticut retailers will face this holiday season.

With unemployment in Connecticut hovering around 8.8 percent, and still some uncertainty in the economy, a larger number of consumers are likely to spend less this holiday season than they have in the past, according to industry experts.

Connecticut retailers are preparing for that reality by cutting back on inventory, hiring less, and in some cases, ramping up sales to attract customers.

“The big question is: are customers going to hold back or take some risks?” said Timothy Phelan, president of the Connecticut Retail Merchants Association. “Among our members there is always optimism and they are hopeful this year will better than the last. But they also realize that from a consumer’s perspective the economy hasn’t fully turned around yet.”

Holiday retail industry sales are projected to fall about 1 percent this year to $437.6 billion, according to the National Retail Federation.

While this number falls significantly below the 10-year average of 3.4 percent holiday season growth, the decline is not expected to be as dramatic as last year’s 3.4 percent drop in holiday retail sales, nor as severe as the 3 percent decline in annual retail industry sales expected for all of 2009.

Phelan said he is projecting a “conservative Christmas shopping season” in Connecticut, noting that the state typically falls in line or slightly above national averages.

 

Profits On Wish List

He said there is hope that Connecticut will fare better than other parts of the country because the state’s unemployment rate is well below the national average. But holiday sales in Connecticut typically get a boost from wealthy shoppers in Fairfield County, a region that has been hit hard by the recession.

Retailers have trimmed expenses and reduced inventories because they don’t want to overbuy and then be forced to sell goods at huge discounts, a trend that hurt many companies last year, Phelan said.

“Connecticut retailers feel like they’ve positioned themselves for a profitable Christmas,” Phelan said. “I think the first weekend after Thanksgiving will set the tone on what type of holiday season it’s going to be.”

 

Seeing Turnaround

Kevin Keenan, general manager at Westfarms Mall in Farmington, said he is “cautiously optimistic we will have a good holiday season.”

He said 2009 has been a tough year for retailers, but they started to see a turnaround in sales at the mall in September and October.

He’s hopeful that momentum will carry into the end of November and December.

Surprisingly, Keenan said the 2008 holiday season was a “strong” one for Westfarms and “significantly,” better than 2007, despite holiday retail sales being down 3.4 percent nationally in 2008.

Keenan credited those strong results to the addition of 35 new retailers the mall has been able attract since late 2007, including big names like Tiffany’s, Louis Vuitton, and H&M.

“We are hoping to continue that growth trend this year, but being realistic, I would be thrilled with breaking even,” Keenan said.

The key for many retailers could be their ability to attract bargain hunters.

According to a recent National Retail Federation survey, more than half of holiday shoppers said that sales and price discounts, or everyday low prices will be the most important factor when deciding where to shop. Meanwhile, factors like selection, quality, convenience and customer service declined as important factors compared with last year’s survey responses.

Overall, U.S. consumers plan to spend an average of $683 on holiday-related shopping, a 3.2 percent drop from last year’s $705, according to the retail federation.

 

Door Busters

Jim Bellew, a store manager at JCPenney in Westfarms Mall, said JCPenney will attempt to lure customers with big door buster gifts and discounts the day after Thanksgiving. For example, they will be offering a Wonderwall video projector for $68.88 after a $20 rebate.

“Shoppers are going to be smart and look for good value at good prices,” Bellew said.

Bellew said the store has added about 100 part-time associates as they prepare for their busiest time of the year, and they have already started to extend holiday hours.

On Black Friday, the store will be open from 4 a.m. to 11 p.m., Bellew said.

Adam Cormier, a spokesman for the AT&T Experience Store at Westfarms Mall said “data-centric” wireless devices, or smart phones will be on the top of many people’s wish lists this Christmas.

“People want a device that has a lot of different functions like texting, e-mailing and the ability to surf the Web,” Cormier said. “They save people money because they can consolidate a lot of what they want into one device.”

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