At Macy's in Northgate Mall, Christmas began a month before Halloween. Here, holiday cards and decorative Santas were marked down before...
At Macy’s in Northgate Mall, Christmas began a month before Halloween.
Here, holiday cards and decorative Santas were marked down before pumpkins came off front porches. Kris Kringle had arrived amid the Monster Mash.
As soaring energy prices eat into the budgets of shoppers across the nation, retailers have concocted a hopeful remedy: Discount early, often and throughout the season.
Retail giant Wal-Mart launched its holiday ad campaign the day after Halloween, calling it the company’s “earliest and most aggressive” holiday launch in history.
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Other retailers have begun offering early discounts and promotions to give consumers time to plan ahead.
“Retailers aren’t necessarily trying to get people to buy before they realize they have no money,” said Ellen Tolley Davis, spokeswoman for the National Retail Federation. “They’re trying to help, by [enabling them to] spend over a period of several months.”
U.S. consumers are expected to spend $435.3 billion this holiday season — a moderate 5 percent jump versus a year ago.
In comparison, 2004 holiday sales rose 6.7 percent , the retail federation said.
The season’s performance is critical. Retailers ring up between 25 and 40 percent of their total sales during the last three months of the year.
Though a $45 car fill-up seems jarring, retail experts say it’s not gasoline prices but home-heating bills that will have the largest effect on holiday spending.
With consumer confidence on the precipice, a large home heating bill might compel consumers to trim their gift budgets, said Purdue University retail-management professor Richard Feinberg.
“Retailers better be praying that the first home-heating bill does not occur at the height of the holiday season,” he said, “because that’s going to be dramatic.”
Some retailers worry that shoppers will buy from fewer stores as they cut back on car trips.
Toys R Us is responding by offering more exclusive products and aggressive pricing to win shoppers.
Last year, the Aquadoodle drawing mat was its surprise hit. This year, it worked with toy maker Spin Master to offer a “Thomas the Tank Engine Toot ‘N Doodle” version.
Liz Huehnergarth, 29, has felt the pinch of energy prices. These days, the Seattle stay-at-home mom drives far less frequently to her favorite mall — Bellevue Square.
To cut costs, she and her husband opted to give photos of their infant daughter to their families this year, in lieu of “buying a lot of gifts.”
“I do notice it,” she said of gas prices. “I drive much less frequently.”
Consumers here are less likely to feel the pinch of energy prices, though they will see the same discounts as other shoppers across the country.
Puget Sound Energy increased its rates Oct. 1, but the amount wasn’t dramatic. For a household that uses a 12-month average of 80 therms of natural gas per month, the bill would rise 13.3 percent, or $11.31, to $96.48.
That’s not the type of jump that compels shoppers to clamp down on spending.
The National Weather Service, meanwhile, expects a warmer-than-usual winter here.
Evidently responding to retailers’ prompts, shoppers have started early as well. In a recent nationwide holiday-shopping survey, 59 percent of the respondents said they would begin buying gifts before Thanksgiving, according to General Growth Properties, the second-largest U.S. mall operator.
“We noticed that people are already doing their [holiday] shopping in downtown,” said Nicole Grubbs, marketing manager of Westlake Center, a General Growth property. “It seems to be getting earlier and earlier every year.”
At Seattle’s University Village, the holidays aren’t yet in full swing. General manager Susie Plummer said roughly 60 percent of the retailers have holiday window displays.
She hasn’t seen much early discounting, although the outdoor mall serves a more affluent demographic.
Not all discounts will necessarily chip away at retailers’ bottom line.
International restrictions on apparel exports were lifted in January, resulting in a surge of shipments from China to the U.S.
J. Craig Shearman, government-affairs spokesman for the National Retail Federation, estimated the end of restrictions would eventually bring prices down an average 12 percent on commodity items (think undershirts and white gym socks).
“The cost for apparel has definitely come down,” Shearman said. “Retailers are paying less for apparel. That has helped them pass on savings to consumers.”
Carrie Johnson, an analyst at market watcher Forrester Research, said high gas prices won’t necessarily drive consumers online.
When brick-and-mortar stores are nervous about consumer confidence, they tend to slash prices so dramatically that even online retailers can’t compete.
The bargaining chip for online retailers: free shipping.
“When push comes to shove, retailers would rather consumers shop in stores than online,” Johnson said. “Average orders are so much higher in stores, simply because [of] the impulse factor.”
Spirit of season
Larger bills or no, retail experts Dick Outcalt and Patricia Johnson said most consumers will use the holiday season as an excuse to spend.
“That’s not when they will cut back, particularly when costs of the basics are increasing,” Johnson said.
“There’s the inclination for people to say it’s OK to indulge ourselves or indulge someone else because, after all, it’s Christmas.”
Joan Taylor, 42, of Ballard, said she hasn’t seen many compelling deals yet. She’s changed the way she runs errands to save gas, but what about cutting back on Christmas?
“Not on giving,” she said, sitting in the Northgate Mall food court with her mother and daughter.
“I will [cut back] on driving and heating my house.”
Monica Soto Ouchi: 206-515-5632 or firstname.lastname@example.org