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December 20, 2006
Retailers are feeling blue this year, the holiday shopping season not being as green as they had hoped. Based on a weekend, survey America's Research Group (ARG) has lowered its forecast of Christmas retail sales to 2.7% above last year's level from 3.1%, which it had predicted in mid-November.
"The lack of a 'must-have' item for Christmas and the lackluster way retailers have approached the Christmas season this year compels me to lower my Christmas retail forecast for only the fourth time in 20 years," said CEO and founder C. Britt Beemer. "Shoppers are just not seeing the excitement at the stores," he added.
"Retailers should not expect that an extra shopping day this year will save them, because only 36.6% of shoppers said they expect to shop on December 24th," Beemer said," and half of those respondents sounded very unsure of themselves."
The newest ARG research highlighted some shifts in shoppers' behavior:
• Toys, electronics and jewelry are the only bright spots this Christmas. Toys rank #1 with 34.3% buying toys so far this season compared with 31.9% at the same point last year. Electronics have surged this year with 24.2% buying them compared with only 16.9% last year. Jewelry sales are up 16.1% this Christmas season from 13.9% last year.
• About 40% of consumers (39.6%) shopped at Wal-Mart compared with 43.2% last year, 17.4% shopped at Target compared with 12.3% last year, 15.7% shopped at Best Buy compared with 11.6% last year, 14.2% shopped at Toys R Us compared with 12.8% last year and 17.6% shopped at JCPenney compared with 16.4% last year.
• Lower store staffing levels have driven over one fifth of shoppers (22.6%) away from stores compared with 20.9% last year.
• Shoppers are not happy with the discounts being offered with 25.0% feeling the savings and discounts offered are less compared with last year. A year ago 20.1% felt the offers were less compared with 2004.
• Gift card buying is at an all-time high with 49.4% having already bought them and 38.8% of those who have not purchased gift cards plan to this Christmas season.
• If shoppers don't see 50% off this season, nearly 40% will either buy fewer gifts, buy less expensive gifts or will buy gift cards.
• The number of shoppers this weekend was at 59.0%, barely beating out last year's figure of 57.1%.
• Nearly one in three consumers (30.9%) feel stores are less decorated this Christmas, 23.9% have noticed that stores are playing less Christmas music this year, and 67.1% believe store employee morale improves when Christmas music is being played in the store.
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