TUPELO • With the Christmas shopping season nearly a week shorter this year, retailers are gearing up for what should be a competitive month.
But the good news is that many retail CEOs say the U.S. consumer is financially healthy given the economy remains strong and the unemployment rate is near a 50-year low. But keeping up with shoppers’ behavior has been challenging for retailers, whether it’s the years-long shift to shopping online or the more recent desire to rent or buy second-hand clothes and other items. Retailers also face increasing pressure from online leader Amazon, which has been raising the stakes in speedier shipping.
Jack Reed Jr., chairman and president of Reed’s department store in Tupelo, said the six fewer days for shoppers this year means retailers have to be more aggressive and attentive in getting merchandise into shoppers’ hands.
September’s higher temperatures held back sales of fall and winter apparel sales, he said, further compressing what was going to be a shorter holiday shopping season.
“It’s made it that much more important for our sales team and sport people to just be ready for full speed ahead,” Reed said. “With one less weekend in between Thanksgiving and Christmas, we’re triple-crossing our fingers. We’ve had a good year so far, which is encouraging if past is prologue.”
The National Retail Federation forecasts that holiday sales will rise between 3.8% and 4.2% even as the ongoing U.S.-China trade war creates some uncertainty around pricing and supplies. Sales growth at the top of that range would double the disappointing 2.1% growth seen in November and December of 2018, which fell well short of the group’s prediction of 4.3 % and 4.8 %.
The NRF expects online and other non-store sales, which are included in the total, to increase between 11% and 14%, for the holiday 2019 period. The NRF forecast, which considers economic indicators such as consumer credit, disposable personal income and monthly retail sales, excludes sales from autos, gas, and restaurants. Other groups are more optimistic: Deloitte expects holiday retail sales to rise 4.5 % to 5%, and AlixPartners predicts growth of 4.4% to 5.3%.
eMarketer forecasts total US holiday retail sales will climb 3.8% to $1.008 trillion this year. That would mark the first-ever trillion-dollar holiday season.
“Holiday spending growth will be driven by a consumer economy that remains robust, due to low unemployment, rising wages, a strong stock market and healthy consumer confidence,” eMarketer principal analyst Andrew Lipsman said. “At the same time, rising tariffs, trade war tensions, stock market volatility and dampening consumer sentiment all weigh on the season’s growth potential. A shortened calendar between Thanksgiving and Christmas also presents a challenge.”
Brick-and-mortar remains dominant, as Reed alluded to. In-store sales for the 2019 holiday season will increase by 2.5% to $872.25 billion. Brick-and-mortar still represents the majority (86.6%) of holiday sales, but its share has steadily declined.
The NRF projects e-commerce sales to rise more than three times as fast as the total industry’s. The group forecasts U.S. online and other nonstore sales to increase between 11% and 14% annually, totaling $162.6 billion to $166.9 billion.
This year’s Christmas shopping season is the shortest since 2013 and six days shorter than last year. Walmart and others are trying to get into the minds of shoppers sooner, with earlier deals and advertising. This season is also different because more retailers like Walmart and Amazon are offering next-day delivery, raising the pressure for them to satisfy shoppers without any glitches. Amazon has said that more than 10 million items now qualify for next-day delivery for its Prime members, who pay $119 a year.
“People talk so much about Amazon, and you see the FedEx trucks and UPS trucks and now double-18-wheeler trucks instead of single ones,” Reed said with a laugh. “But still 80 percent of all Christmas retailing will be done in real brick-and-mortar stores. So we just have to make sure that we’re earning the business of the people people who enjoy shopping in real brick-and-mortar stores and like handling the merchandise to look at it and getting it gift-wrapped for free.”
Heading into the official start of the holiday season, big discounters like Target and Walmart and others that have consistently won over shoppers with their low prices and expedited shipping should be among the clear winners. Off-price discounters like T.J. Maxx, which have fared well by offering customers a treasure hunt experience should also do well. Meanwhile, it’s a mixed bag regarding department stores. Macy’s is touting its interactive experience called Story in 36 stores, while Kohl’s is offering a slew of exclusive partnerships like the Elizabeth and James brand founded by Mary-Kate and Ashley Olsen.
Jeff Syder, general manager of The Mall at Barnes Crossing, said the compressed Christmas selling season isn’t a problem.
Having been with the mall since its opening in 1990, Snyder said, “For us, the shorter seasons are traditionally the stronger seasons. I think it’s because they start thinking about it and realize they don’t have the long stretch to shop. It’s always a priority to shop this time of year, of course, but when they see they have fewer days to get it done, they come out to shop .... and it seems like since last October, we’ve seen that surge of shopping.”
Marla Summers said she’ll order some gifts via Amazon, but will be out Thursday and Black Friday looking for in-store deals.
“My girlfriends and I will be out waiting in the cold or rain or whatever it is because there’s nothing like that rush,” she said. “The boys can watch their football, but us girls will be having our own quality time at the stores.”
The Associated Press contributed to this report.