Has the Grinch moved to Washington?
Retailers will soon find out if concerns over the so-called fiscal cliff and possible tax increases deter any shoppers from malls nationwide on Black Friday, the unofficial start to the holiday shopping season.
The National Retail Federation says holiday sales will rise 4.1 percent to an estimated $586.1 billion this year, compared with a 5.6 percent gain in 2011. Even though thousands of stores are opening earlier, 147 million consumers, or 5 million fewer than last year, plan to hit the malls this weekend, according to an NRF survey conducted by BIGresearch.
“We hear these guys on cable television with eerie music, talking about doom and gloom,” Mortimer Singer, chief executive officer of New York consulting firm Marvin Traub Associates, said in a telephone interview. “Consumers get nervous when this kind of stuff happens.”
To put them in a spending mood, retailers are opening earlier than ever and dangling discounts such as $7 board games at Target and $19 sweaters at Gap. Mindful that many shoppers plan to buy gifts online, Target and Best Buy are matching prices offered by online competitors such as Amazon.com, while some merchants are adding kiosks and mobile checkouts to integrate online and in-store shopping. Others have giveaways such as free family portraits in November at J.C. Penney Co. stores.
In an effort to lure shoppers into stores, malls have added such features as lounges, gift-wrapping services, even child-care, Joel Bines, a Dallas-based managing director in the retail practice at AlixPartners, said in a telephone interview.
The moves are “almost entirely related to the amount of business that has moved to the Web,” he said.
U.S. consumers, whose spending makes up about 70 percent of the U.S. economy, have coped this year with political uncertainty, higher fuel prices and, in the Northeast, the fallout from Hurricane Sandy.
There are signs of improvement, including rising home prices and a jobless rate that's ducked under 8 percent in the past two months, the lowest since January, 2009.
Black Friday got its name because retailers traditionally turned profitable on the day following Thanksgiving. While that is no longer true across the board, Black Friday has become a powerful marketing tool and one of the busiest days on the U.S. shopping calendar. More than half of American consumers plan to shop during the holiday weekend, with about one-third hitting the stores on Black Friday alone, according to a survey conducted by the International Council of Shopping Centers based in New York.
Retailers will benefit from the maximum number of days possible — 32 _between Thanksgiving and Christmas this year, said Roseanne McCauley, vice president of the Americas for Experian FootFall, which tracks traffic and other data for retailers.