Retailers get ready for a brighter holiday season

Consumers may be thinking more about buying candy for Halloween than gifts for the holidays right now, but food-themed tree ornaments already sprout from a display at Sur La Table in Towson Town Center.

The glass ornaments — chocolate-covered strawberries, cupcakes and margaritas — dangle amid nonstick bakeware, table settings and juicers.


"It's our little tease for what's to come, to whet the appetite," said John David Scalia, Mid-Atlantic district manager for the culinary tools specialty chain. "We're planning for a big season."

As are many other retailers, hoping that a rosy outlook this year will translate into improved sales. Forecasters are calling for a stronger showing than last year, with predictions for sales growth ranging from 3 percent to 5 percent. Retailers are boosting seasonal hiring, planning promotional strategies, preparing holiday setups and making it easier for consumers to shift between shopping in-store and online.


"Retailers are focused with a laserlike precision on their most important time of the year," said Ken Perkins, research analyst with Retail Metrics Inc., in a report this week.

Target unveiled new digital tools last week, including a wish-list app and new mobile and tablet apps, and offered free shipping on all online orders through Dec. 20. The retailer has expanded the number of online items available for store pickup and promised that 80 percent of those orders will be ready in an hour.

Others are boosting hiring in anticipation of a strong season, with Macy's, Kohl's, Wal-Mart, Amazon and Game Stop all planning to hire more people than they did last year.

After a sluggish 2013 holiday season, in which sales growth of 3.1 percent missed expectations and deep discounts hurt profit margins, the outlook for this year has brightened. The Retail Metrics report noted that all early forecasts have fallen in the range of 3 percent to 5 percent, with the National Retail Federation calling for a sales bump of 4.1 percent, a full percentage point above last year.

Consumer confidence is getting a lift from improved job creation and lower unemployment, Perkins said. And one extra shopping day this year and improvements retailers have made in selling across in-store and online channels also should help, he said.

"Consumers should find more money in their pockets heading into the holidays, thanks to job gains and falling gas prices," said John Challenger, CEO of the outplacement firm Challenger, Gray & Christmas, in a statement.

Besides being higher than last year, the average growth forecast of 4.2 percent would be strong in comparison to an average annual growth rate of 2.9 percent over the past decade, said Sterne Agee analyst Chuck Grom in a report.

Shoppers plan to spend an average of $804, up 5 percent from last year's actual $767, according the retail federation's annual holiday spending survey, released this month.

A separate holiday shopping survey by consulting firm Accenture said a quarter of consumers plan to spend more this year compared with a fifth who planned to do so in 2013. Of those planning to spend more, 28 percent said they have more discretionary income and 22 percent said they have greater job security, up from 15 percent in 2013.

"We're expecting to beat last year's numbers, and think it's going to be a good holiday," said Randy Shayotovich, co-owner with his wife of Cloud 9 Clothing, which has stores in Canton, Hampden, Towson and Rockville.

For a small retailer that ordered all its winter inventory in the spring, loading up on jackets and sweaters, the key is to have the stores fully stocked at the start of the season, then adjust inventory levels among stores as needed as the season progresses, Shayotovich said.

Brandon Shaw, 22, who was shopping for himself at Forever 21 in Towson Town Center on Friday, said he has not set a budget for holiday shopping but feels that he can spend more this year. The Morgan State University theater and music senior said he has had no trouble this year finding jobs, which have included gigs as a classical singer and freelance stage manager.


Still, Shaw said he'll be looking for sales and hoping to buy gifts that are "meaningful" as opposed to expensive.

"Where there's a good sale, that's where I'm going to go," Shaw said.

Despite planning to spend more, many consumers are expected to continue to be price-sensitive and deal-driven this year, experts said. Accenture found that 96 percent of those surveyed said that discounts will be important to their buying decisions and more than a quarter said it would take a discount of 50 percent or more to persuade them to make a purchase.

"Retailers will promote aggressively to drive traffic, likely on par with last year," Perkins said in the Retail Metrics report.

At the Towson Sur La Table, signs throughout the store advertise seasonal jobs, while others promote extra discounts in December to shoppers who buy through Nov. 26.

Scalia, the district manager, says shoppers can expect discounts of up to 70 percent on some items and exclusive products during the Black Friday weekend, although exactly which products will get the deep discounts is under wraps.

"We have great deals," Scalia said. "It's a great time to present them."

Besides seeking bargains, shoppers are expected to buy more than ever online this year. The National Retail Federation survey found that 56 percent of consumers will shop online at some point.

"It was inevitable we're going to continue to see more people shop online, especially with the adoption of mobile," said Kathy Grannis, a federation spokeswoman.

While mobile shopping is increasing, another trend, self-gifting — or buying for yourself — is on the decline this year, the survey found. Of the more than half of shoppers who plan to look to sales for nongift items, the amount they say they will spend on themselves has decreased on average to $126.68 from $134.77.

"We believe that some of the optimism in the economy right now could be driving holiday shoppers to feel a lot less reliant on end-of-year discounts to purchase for themselves," Grannis said.

In a separate survey released by the International Council of Shopping Centers, just over a third of consumers said they have started or will have started holiday shopping by the end of October.

"Consumers seem to be interested in getting out to stores early this season," said Jesse Tron, ICSC spokesman. "As a result, the importance of November to the overall season can't be overlooked."

Whether or not consumers are shopping early, they'll likely be out in force on Black Friday. The ICSC survey found 86 percent will have started by the end of Thanksgiving weekend.

The Accenture survey also found that enthusiasm for post-Thanksgiving weekend shopping has climbed to its highest level in eight years, with two-thirds of shoppers surveyed saying they plan to shop the Friday after Thanksgiving.

But don't forget the Halloween candy. It's only October, after all.


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