DAVID RIORDAN, co-owner of OOP! on Ives Street and in the Providence Place mall, is expecting holiday sales to be 'gangbusters' this year.
David Riordan expects holiday sales at the two OOP! stores to be “gangbusters” this year.
“What’s going on with the stock market and the price of gas is very helpful to us,” said Riordan, who co-owns the stores at Providence Place and on the East Side.
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“Last year was OK,” he said, “a couple of percentage points over the year before, and the last couple [years] were touchy, but we’ve been up all year long. I see it as a good sign and that things are moving in the right direction.”
The National Retail Federation also sees things as looking up this holiday season though not so much as last year’s.
“Consumers have faced a number of economic challenges this year and have taken them in stride,” Rosalind Wells, the NRF’s chief economist, said in a news release. “Although sales gains will not be as robust as last year, retailers can still expect above-average holiday sales growth.”
According to the NRF, the average annual increase in sales during the holiday season has been 4.6 percent in the last decade. Last year, holiday sales rose by 6.1 percent to $435.6 billion, and this year the NRF is predicting that total holiday retail sales will increase by 5 percent, bringing holiday spending – meaning, November and December sales – to $457.4 billion.
But locally, retailers are expecting to do better than that.
“We’re predicting, because of consumer confidence, that there will be a 5.5-percent growth in Rhode Island,” said Paul DeRoche, executive director of the Rhode Island Retail Federation. “Consumers faced a number of economic challenges,” he added, “but we really feel that with gas prices down and consumer confidence [up], that this Christmas will be a strong sales Christmas, and we expect above-average holiday sales growth.”
For Riordan and most retailers, that increase is of the utmost importance, because one-fifth of retail industry sales nationwide happen during the holiday season. “If we don’t make it then, we don’t have a good year,” Riordan said.
Providence Place is also looking forward to a busy season – not only because of national and local forecasts, but also because of some major additions to the mall.
“If you look at what we’ve brought in with new stores, we have a lot of new merchandise categories,” said Craig Gorris, the mall’s general manager. “JCPenney is new since last year, so now we are a three-department-store mall. And the new stores we brought in do a lot of business – specifically, Apple. Sephora will also be opening right before the holiday season.”
“Overall,” Gorris concluded, “we are optimistic about our holiday sales.”
Although energy costs and other factors may have left many people with less disposable income this year, that’s not expected to cut into holiday shopping too much.
“Consumers make small sacrifices all year so they can splurge a little during the holidays,” said NRF President and CEO Tracy Mullin.
Last year, Americans spent an average of $421.30 on family gifts, $78.99 on gifts for friends, $21.05 on gifts for co-workers, $44.16 on other gifts and $86.62 on themselves during the holiday season.
Additionally, according to Frank Badillo, a senior economist for Retail Forward, many of the causes of decreased spending are not likely to be felt until next year.
“The holiday won’t feel the worst effects from the lagging impact of higher interest rates, a slowing housing market and high fuel prices,” Badillo said in a news release. “The worst will probably be felt in the first half of 2007.”
Retail Forward, an Ohio-based management consultant and marketing research firm, is also predicting a bigger increase in holiday spending than the NRF: 5.5 percent nationwide. (The calculations are different, however; Retail Forward’s estimates show higher annual increases than the NRF’s figures in 10 of the last 11 years.)
Retail Forward’s holiday sales projections also distinguish between sectors of the retail world.
The expectation is that conventional and national department stores will see a decline in sales, apparel and accessory stores will hold steady, shoe stores will be weak, jewelry stores will be “boosted by higher prices,” furniture and home furnishing stores will see sales growth and consumer electronics and appliance stores will slip.
Superstores are expected to have double-digit growth, and warehouse clubs are set to perform well, the firm predicted. Online sales are also expected to grow, by 23 percent.
