Every year, the winter holiday season seems to ambush Americans earlier and earlier. But forget the past. Most people have probably already noticed that Halloween merchandise and candy sales began appearing in their local grocery and chain stores last week. And that‚Äôs just a sign of things to come. As the nation is trying to shake off the cobwebs of recession and reignite growth, the country should be prepared for one of the earliest kickoffs of the Christmas shopping season in memory.
‚ÄúI think you‚Äôre going to see the earliest Christmas you‚Äôve ever seen,‚ÄĚ said Dr. Chris Kuehl, managing director, Armada Corporate Intelligence and NACM economic analyst. ‚ÄúI‚Äôm surprised it isn‚Äôt out there already. The Halloween stuff is already hitting and retailers are going to be pumping that like crazy all the way through September and October. Christmas merchandise is scheduled to come out as early as the first of October.‚ÄĚ
This week, consumer bankruptcies again reported a rise on their trek to an anticipated 1.4 million for the year, while the unemployment rate hit 9.7% as employers slashed 216,000 jobs. Personal incomes have seen nominal gains after months of declines and the Obama Administration touts that tax relief from the American Recovery and Reinvestment Act has boosted disposable incomes. Many major retailers posted drops in sales in August, though, admittedly, those declines weren‚Äôt as massive as in previous months. And, the back-to-school shopping season was even a modest boon for some medium- and small-size retailers, who actually posted considerable gains. With this potpourri of signals and an antsy urge to have the recession clearly at an end, the hunt is now on as retailers try to attract those consumers that have tired of frugality.
‚ÄúThe assumption on the part of retailers is that there‚Äôs a limited amount of money out there and there‚Äôs a limited number of consumers who are going to spend. And whoever gets to them first wins,‚ÄĚ explained Kuehl. ‚ÄúSo, there‚Äôs going to be a lot of people saying, ‚ÄėOkay, we‚Äôve gotten our Christmas shopping taken care of. Now we just need to hide the presents from the kids for the next three months.‚Äô‚ÄĚ
What emerged in the back-to-school numbers was that consumer demand is still present. It‚Äôs just that most consumers are responding to discounts and sales, as seen in the National Retail Federation‚Äôs (NRF) back-to-school and back-to-college surveys. The NRF also found that store traffic increased dramatically as people went into stores to check out bargains, though that didn‚Äôt automatically translate into purchases, as evidenced by the August retail numbers.
‚ÄúThey‚Äôre not necessarily buying,‚ÄĚ stated Kuehl. ‚ÄúBut the pattern that we‚Äôve seen in the past is that if people start going to the stores and start looking, then they go home and think about what they saw; they look at their budget and then come back and spend.‚ÄĚ
With the back-to-school bonanza over, retailers are now keying in on Halloween, setting their sights on Thanksgiving and expectantly awaiting the outcome of what will most likely be an extended Christmas shopping season.
‚ÄúThere‚Äôs sort of a signal out there that consumers are getting a little impatient with the recession and would like to get back in the game,‚ÄĚ said Kuehl. ‚ÄúAnd that‚Äôs good news for later in the year. The big thing now is everyone is going to be watching the Halloween sales.‚ÄĚ
For the remainder of the year, Kuehl believes that the third quarter will culminate in growth, with that momentum extending over into the end of the fiscal year. ‚ÄúAnd the jobs are going to come shortly thereafter,‚ÄĚ stated Kuehl. Even though the unemployment rate in the United States has ticked upwards toward 10%, he thinks that the country has hit the peak in terms of job losses. ‚ÄúI don‚Äôt see a whole lot of change on the employment side until after the first of the year. But I don‚Äôt think it‚Äôll be too long into 2010 before we start seeing improvement.‚ÄĚ He added that the improvement will be marginal at first, so don‚Äôt expect the United States unemployment rate to drop to 5 or 6% any time soon. But, it will be improvement nonetheless.
‚ÄúThe number of jobs losses has diminished,‚ÄĚ said Kuehl. ‚ÄúWe‚Äôre not looking at 300,000 per month anymore, but we‚Äôre still looking at losses instead of gains. We need for that to turnaround, but no one has quite yet figured out the magic way of how to accomplish that.‚ÄĚ
Matthew Carr, NACM staff writer. Follow us on Twitter @NACM_National