Citing economic uncertainties, central Kentuckians say they plan to limit gift buying
Lexington, KY - Sure, we saw the tell-tale signs of Christmas in stores right after Labor Day, and Christmas music began
playing non-stop on at least one local radio station the day after Halloween, but the official start of the holiday shopping season is the day after Thanksgiving.
And this will be a longer one, too — 32 days — the longest possible calendar stretch, because Thanksgiving arrives early this year (Nov. 22). This also means there will be five full weekends of shopping in the mix.
The indicators are all there for the marketplace to have a profitable retail season. So, will it be?
“There is the continued high rate of unemployment, fears of job losses, extremely modest wage increases, the depressed housing market and uncertainty in stock prices. Accordingly, I project that holiday retail spending will increase by 3 percent,” said noted economist Anthony Liuzzo of Wilkes University in Wilkes-Barre, Pa.
The National Retail Federation, the nation’s largest retail trade group, is slightly more optimistic, predicting holiday sales will rise 4.1 percent over 2011.
No matter what, retailers had better get it right. This crucial holiday shopping period brings in roughly half a trillion dollars in sales, nearly a fifth of the U.S. annual total.
As they were when Business Lexington surveyed central Kentucky shoppers in 2011, many are cautious about holiday shopping this year. They’re concerned about everything from potential tax hikes to nervousness about their own workplace.
“A little leaner than normal,” predicted Jim, a consumer from Lexington, as he shopped at Hamburg Pavilion. How much holiday buying will he do?
“Probably a lot less; I’ve got a lot of family members, for one. They’re changing management at the company I work at. There’s a lot of uncertainty about what’s going to happen next year. Based on the end of the tax cuts and the new health-care bill and everything else that’s coming out, I will pay $4,600 more in taxes.”
Jim also mentioned the economic impact of the damage from Sandy in the Northeast and high gas prices as playing a negative tune on his psyche.
Chris, another shopper from Lexington, will cut back on holiday buying.
“Number one — [My wife] is not working right now. We’re concerned about the economy. Those are the two main reasons,” he said.
His family will also employ another shopping strategy that may not please very many local retailers.
“She does all of the shopping and does it online. At times, we will still go out and buy gifts, but online is so much more convenient,” he said.
Economist Liuzzo confirms Chris’ and other Americans’ fascination with online Christmas buying. He reports that in 2011, these type sales jumped 15 percent over the year before, for a total of $37.2 billion. Consumer electronics is a growing category. Not only do we have Black Friday [day after Thanksgiving] shopping, but we now have Cyber Monday, the new start of online holiday sales.
In the Chevy Chase shopping district, Marie, who now lives in downtown Lexington, has her own “less is best” holiday agenda. She has an unsold home back in Alabama.
“My spending plan will be for a little less, because I changed jobs and moved. I always make some of my Christmas gifts, so that’ll be part of how I supplement spending less,” she said.
Shannon, a University of Kentucky student, is new at earning her own cash for holiday shopping.
“I’m reaching a new point in my life where I’m buying Christmas presents for people with my own personal money I make from jobs. I am definitely going to be more conscious about what I buy, how much it is and who I buy for,” she said. “Honestly, I’ll probably not be buying as much. I’ll be conscientious of what I am doing.”
Kristen, who works in retail and in the hospitality industry, was employed in Maine during part of 2012 but is now home in Lexington.
“I’ll probably spend a little less this year than I did last year,” she said. “I’ll probably only buy for my little sister, since she’s the only one who needs presents.”
One woman, Michelle, admittedly was pessimistic about holiday shopping following the election but now sees things differently.
“Wednesday morning after the election, I didn’t have high hopes for the retail season. But after getting out and being among shoppers, I feel much more optimistic,” she explained. “That’s because there are a lot of beautiful, useful things to buy people for Christmas. I think people will still spend on their kids. Once they’re out there shopping, they’ll see things for themselves and end up spending as much as last year and the year before.”
Peggy, from Lexington, had some upbeat news this year that will impact her spending plan.
“I’ll probably do the same as last year. My earnings went up, so I’m able to keep up,” she said.
Liuzzo said many shoppers began holiday browsing in October; most begin serious buying around Thanksgiving. The holiday shopping season usually peaks on the Saturday before Christmas.