As malls and stores start to deck the halls, retailers see reason to cheer this holiday season.
“Traffic is up, sales are up and we’re feeling good about the holidays and where we sit today,” said Nina Robinson, vice president of marketing and communications for Irvine Company’s shopping centers, which include Newport Beach’s Fashion Island, Irvine Spectrum Center and The Market Place, which straddles Irvine and Tustin. “We expect holiday gift giving will be brisk.”
Mall operators and retailers likely are the most upbeat they’ve been in two years amid signs of economic improvement, including a better than expected back-to-school shopping season that wrapped up in September.
National surveys project a 2% to 3.5% rise in holiday sales this year from 2009. The projected uptick is moderate. But it’s the first anticipated sales increase since the downturn took hold in earnest in late 2008.
The holiday shopping season kicks off on Black Friday, the day after Thanksgiving, and runs through December or January, depending on who’s counting.
Shoppers have become accustomed to the slow recovery, according to Greg Palme, an audit partner for the retail sector for New York-based Deloitte LLP’s Costa Mesa office.
They’re less anxious about spending, he said.
“As long as the consumer doesn’t get surprised, they’ll spend more,” Palme said.
A surprise, according to Palme, would be a dramatic economic shift, such as a jump in unemployment or a big drop on Wall Street.
Surveys portray a jollier shopper this year.
Shoppers are expected to spend an average of $689 this year, up from $681 last year, according to the latest holiday survey from the Washington, D.C.-based National Retail Federation.
Giving jewelry is expected to make a comeback, the survey found.
Giving more expensive gifts—instead of more practical, needed items—signals shoppers are more comfortable with their finances, according to retail watchers.
But the mindset of the downturn still holds sway for many. Holiday spending this year is predicted to be well below 2007, when shoppers spent an average of $755.
Shoppers are “in a buying mood, but they’re also going to buy smart,” Robinson said. “They’re looking for value, regardless of how much money they have.”
Late Deals
Holiday shopping could look a lot like the back-to-school season, with retailers drawing the bulk of their sales at the end.
“There was a slow (back-to-school) start, which was concerning,” Deloitte’s Palme said. “But retailers responded with good discounting. They gave consumers a reason to shop, which gave way to a late surge.”
National back-to-school sales increased a more-than-expected 0.6% in September from a year earlier, following a gain in August as well.
As with back-to-school, retailers are expected to hold back on holiday sales and other promotions and then cut prices later if needed.
“We could see the heavy promotions toward the end of the holiday season,” Palme said.
Discount retailers, such as Target Corp. and Wal-Mart Stores Inc., are expected to be popular again this year. But shopping is expected at a wider variety of stores than in the past two years.
Luxury sales, tepid since 2008, could see an uptick.
“The high and the low are performing well,” Irvine Co.’s Robinson said.
Fashion Island, which caters to upscale shoppers, is set to finish a $100 million renovation in time for the holidays.
The Block at Orange, which includes discount and outlet stores, is expecting to do better this year, said Shannon Feightner, the mall’s marketing director.
“We are definitely expecting another strong holiday season,” Feightner said.
‘Pop-Up’ Stores
“Pop-up” stores, or shops that grab vacant space for a short period of time, are expected at malls across the county.
Pop-ups are a growing trend, given retail space that opened up in the downturn, Palme said.
Toys “R” Us Inc. is opening 600 pop-ups across the nation, including one already in business at Irvine Spectrum Center.
Retailers are in the midst of hiring workers for the season.
Holiday hiring is expected to be up slightly from about 500,000 people in 2009 but still off the levels seen before the recession.
“We’re seeing what I would characterize as healthy improvements in year-over-year hiring of temporary labor for the holiday season,” Palme said.
Retailers hired 720,800 holiday workers in 2007, according to Chicago-based Challenger, Gray & Christmas Inc.
In 2009, retailers hired 501,400 holiday workers, a 54% rise from 2008’s 324,900 seasonal workers, which marked a 22-year low.
