Area retailers are preparing for what is traditionally the most profitable quarter of the year.
“We try to even out the year, but the last quarter is always a huge part of our year,” said Idanna Smith, owner of three toy stores: Juggles in East Greenwich and Wakefield, and the Toy Cellar in Wickford. “We do about 30 to 40 percent of our sales in the fourth quarter.”
According to the 15th annual Consumer and Retailer Mood Survey: Retail Holiday Outlook conducted by Deloitte & Touche in affiliation with the National Retail Federation (NRF), a strong 82 percent of consumers say they expect to spend more or the same as last year. This is the highest percentage since the survey began asking customers this question in 1993.
Consumers in the Northeast say they will be spending $1,029 on holiday gifts this year, which is 12 percent higher than last year’s figure. Retailers surveyed expect November and December sales to increase 4.5 percent from the 1999 holiday season.
Smith’s three toy stores have about 20 regular employees, plus some seasonal help. She said women do most of the shopping.
“Mothers buying for families account for about 60 to 70 percent of my business,” she said. “The rest are aunts, uncles, kids buying for friends. Mothers still do most of the holiday shopping, although in recent years we’ve seen fathers taking on more of a role.”
Smith said the store kicks off the holiday season with a big sale in September and a 40-page color catalog in October.
“That really is the beginning of our busy time,” she said. “Our catalog has been out a few weeks now, and for most people, that’s what seems to drive them – it’s kind of a starting off point.”
As for what people are buying, Smith said the store – which does not carry heavily advertised big-name licensed products like Barbies – isn’t depending on one particular product to get them through the season.
She said Harry Potter, the hero of the series of adventure books that children – and adults – have embraced, has been driving some business. While there are not many licensed Potter products, Smith said, sales of owl puppets, magic sets and wizard hats are up. Games, dolls, gifts for babies and art supplies are popular items.
“A lot of people are doing craft kits for kids,” she said. “Then, they can make their own gifts for relatives and friends.”
The Deloitte and Touche survey projects that 83 percent of holiday shoppers will make purchases at discount department stores this holiday season, which is significantly higher than projections for stores of other types. Forty-four percent of consumers will purchase gifts at a superstore; 41 percent will visit a traditional department store.
“The fourth quarter is our second-largest quarter, but that doesn’t mean this isn’t an important quarter,” said Sherry Lang, vice president of investor and public relations for the TJX Companies, which counts T.J.Maxx and Marshall’s among its divisions. “For the fourth quarter we’re expecting $2.8 billion in total sales, in a year of $9.5 billion for the year, so it’s meaningful.”
Fourth quarter is second in revenues to third quarter because of back-to-school, Lang said. This year, TJX stores are increasing their selection of apparel gift items and trying to take advantage of the two extra selling days – a retail benefit of Christmas on a Monday.
“We are expecting increases in December, and looking forward to a good holiday season,” Lang said.
David Holmes, owner of Holmes Jewelers in North Kingstown and West Warwick, said he thought business was off to a slightly slower start this holiday season. But Holmes is used to it – he said he gets a lot of last-minute shoppers. According to the Deloitte and Touche survey, men are twice as likely as women to shop late.
“Usually right after Thanksgiving it picks up,” he said. “Guys don’t shop until the day before – come in here on Christmas Eve – it’s nothing but men.”
Holmes estimated that he does 40 percent of his year’s business during the holiday season, and that over the 70 years his family has owned the stores, they have cultivated a diverse local client base. Holmes expects that base to select from his wide range of jewelry, which ranges from $75 to $60,000.
Warwick Target Store Team Leader Melissa Bierlein would not disclose Target’s anticipated net gains for the holiday season, but if past years are any indicator, Target Corporation’s fourth quarter 1999 earnings were $494 million, compared with $423 million in 1998.
“It’s the largest quarter of the year,” she said.
Preparation began right after the fall back-to-school push, by adding seasonal workers to the staff.
What are people buying?
“Some of our ads have been really holiday-driven during the last couple of weeks,” Bierlein said. “The toy department has been very busy. We’re selling a lot of home decorating stuff too.”
