At Providence Watch Hospital, a glass case-lined watch retailer and repair shop in Cranston, Service Department Manager Gail Bourassa wasn’t as busy as she’d hoped to be at about 11 a.m. on the day after Thanksgiving, a day that her entire stock was discounted by 30 percent.
The majority of the parking lot in front of the store was empty – a sharp contrast from recent years, Bourassa said.
While the National Retail Federation reported last week that the holiday shopping season started with larger-than-expected customer traffic, it seems that many of those customers were at big-box stores that were able to offer price-slashed door-busters.
But for smaller Rhode Island retailers like Providence Watch Hospital, the weekend after the holiday marked the beginning of an unsure season.
Following 73 months of economic expansion in the United States, a recession officially started sometime in Dec. 2007, the National Bureau of Economic Research said last week. That means this year’s holiday shopping season is the first since 2000 that will occur fully in a recession. NBER also reported that wholesale-retail trade hit a “well-defined peak” in June 2008, a few months into the current recession.
Still, at least one wholesaler says it’s shipping out plenty of products. At Providence’s Décor Craft Inc., Founder and Director Roni Kabessa said his company has been having a banner year. Many of the retailers that DCI deals with might be looking ahead to Valentine’s Day to make up for a slow Christmas season, he said.
Leading up to Black Friday, the day after Thanksgiving, it was unclear whether consumers would curb spending for that weekend. NRF data pegged October retail sales down 0.5 percent from a year earlier.
But in the Ocean State and elsewhere, shoppers on that day came out in droves for slashed prices on electronics, Rhode Island Retail Federation Executive Director Paul DeRoche said last week.
More than 172 million Americans hit the stores on Black Friday weekend, an increase of 25 million from the same 2007 weekend, according to National Retail Federation data compiled by the firm BIGresearch.
At Best Buy on Route 2 in Warwick, the parking lot was packed well before 9 a.m. on Nov. 28. Some customers had waited in line from 10 a.m. Thanksgiving morning for the store’s 5 a.m. opening.
General Manager Steve Faison, who got to work at 3 a.m., said sales were “fantastic.” He said big-ticket electronics, including laptops and flat-panel LCD TVs, were in the highest demand.
By 9 a.m., Providence’s Gigi and Noel Velasco had gone to JCPenney in the Providence Place mall and Best Buy in Warwick. At the latter, they bought two Insignia digital photo frames for about $50 a piece.
“We never do this, I think it’s ridiculous,” Gigi Velasco said. “I don’t think I’ve ever gone shopping on Black Friday, but we wanted to get his kids something special this year and we saw a special in the paper.”
On Cyber Monday, the first Monday after Thanksgiving that’s become known for online shopping, another 84.6 million consumers took to their computers to take advantage of hour-by-hour sales at many retail Web sites, according to NRF. That was 17.5 percent more than 72 million shoppers in 2007 and 39.4 percent higher than the 60.7 million shoppers in 2006.
Bloomberg News last week reported that online spending at U.S. retailers jumped 15 percent on Dec. 1 to $846 million. That was the second-biggest amount on record, as Internet sites lured customers with discounts on clothing and electronics, ComScore Inc. said.
But NRF is still forecasting that holiday-season sales will increase only 2.2 percent this year, which is well below the average annual growth of 4.76-percent that the retailers saw during the 1997 to 2006 period. The organization reported a 3-percent increase in 2007 compared with 2006’s sales.
At least part of the dim outlook is that this holiday season is also a short one. There are only 27 shopping days between Thanksgiving and Christmas, compared with last year’s 32 shopping days.
In addition, DeRoche said, it’s unclear whether consumers will remain as “energetic and enthusiastic” as they seemed to be on Black Friday weekend.
“People remain very cautious and the day-to-day [economic] news doesn’t help that out,” DeRoche said.
He added that Rhode Island, with 9.3-percent unemployment and an estimated $360 million budget shortfall, will likely see a weaker holiday season than other states.
At smaller shops on Black Friday morning, managers and clerks had an optimistic outlook, but they also had fewer shoppers than the bigger retailers offering door-buster sales. By about 10 a.m. at Pendleton Woolen Mills, a women’s clothing and jewelry store in Garden City Center in Cranston, sales clerks Laurie Valle and Cheryl Robi had a few sales, but business was still fairly slow, they said.
“But they’ll be here,” Valle said. “We have a more mature customer, shall we say, and they’ll be here.”
At Up With Learning, a two-store teaching and educational toy retailer, owner Suzanne Dubuc said she’s expecting to see her usual traffic in the two or three weeks before Christmas. She said she’s lowered some of the prices on puzzles and other toys.
“This holiday season, as with everybody else, I’m a little bit guarded,” she said on Black Friday. But, “when times are tough, people will still buy for their kids.”
At Borders in Garden City, General Manager Gloria Sereduck said smaller items like books and CDs will sell well as the season progresses. “I expect that they’ll come in, but every year it gets a little bit later,” she said. “Christmas week, that week will be crazy.”
While retailers are maintaining an optimistic outlook, RIRF’s DeRoche said the shopping traffic could thin.
“I went to four Wal-Marts in the state by 11 a.m. on [Black] Friday and you could not get in the parking lot,” he said. “I met a women coming out who had purchased five televisions.
“What I’m saying is: There were such tremendous bargains and such an excitement on behalf of the consumer to get out shopping, they’re shopping early. My sense is that they’re getting it done earlier, getting it out of the way.”
At Dorothy Williams, an upper-end women’s store in Wayland Square, co-owners Robert and Claudia Williams had stronger than expected sales for Black Friday weekend, though they didn’t rival 2007 figures.
“We certainly don’t expect to match the numbers of 2007, that’s for sure,” Robert Williams said last week. “You don’t have to be a genius to figure that out.”
Like the 30-percent off sale at Providence Watch Hospital, other stores are creating programs that they hope will draw customers. Borders is staying open until after midnight on the weekends leading to Christmas, Pendleton took an additional percentage off its sale prices and Wayland Square retailers are trying to pull business in with a new program.
On Tuesday nights, all the square’s stores are staying open late, offering wine and cheese to customers. A six-person choir sings in the street and there’s free hot cider.
The Dec. 2 event brought sparse traffic for Dorothy Williams.
“I think it’s going to help, but it’s not going to make up my decrease in December business,” Robert Williams said. “There are just too many things going against you. •
