Holiday Shopping Forecast: Partly Hopeful
Much like Santa, Betsy Madson, owner of Classic Toy Shop in Worcester, works all year long to prepare for the holiday season. She starts her Christmas ordering in February, and she and a few part-time employees spend the next eight months or so organizing inventory, managing stock and getting ready. Then, in one month, she does a third of her business for the year.
“These two months are what keep us going,” she said.
So Madson keeps a close eye on expert predictions about holiday spending.
“I listen to all the gurus out there, and it is sounding to me like it’s going to be relatively decent,” she said. “I’m not quite as panicked as I was maybe even in the summertime. I was getting really, really worried then.”
The National Retail Federation (NRF) expects the season will be “summed up in one word: average,” with holiday sales of $465.6 billion. That’s an increase of 2.8 percent over 2010.
The International Council of Shopping Centers (ICSC) predicts shopping center sales will be 2.2 percent higher in November and December than they were during the same months in 2010, for a total of $449 billion in sales. It also predicts a 3-percent increase in “GAFO” sales — general merchandise, apparel and accessories and furniture — compared to 2010. That would bring GAFO sales to $250 billion, still $2 billion less than in 2007.
Both measurements fell year over year in 2008 and 2009 and rose last year.
Both the NRF and ICSC predictions suggest 2011 will be better than 2010, but the improvement won’t be as dramatic as it was from 2009 to 2010.
A Gallup poll says Americans on average expect to spend $712 on holiday gift-giving this year, about the same as they planned to spend last year, but down from more than $900 in 2007 and 2008. On the other hand, a survey by American Express predicted Americans will spend $831, up from $710 last year. Still another poll from the NRF puts the average at $704, down slightly from last year, but above 2009’s figure of $682.
Outplacement consultancy Challenger, Gray & Christmas Inc. predicted in September that seasonal hiring would be the same, or a bit lower than in 2010. It confirmed that October job gains hit 141,500, nearly as high as 2010. Hiring hit a 22-year low in 2008, with 38,600 seasonal workers hired in October.
At Cloud Nine Toys in Sudbury, husband-and-wife team Charles and Laura Brauer still see customers looking for quality products and carefully considering purchases, which they hope will give them an edge over big-box stores.
“We’re hopeful that it will be better than last year,” Charles Brauer said.
Both the Brauers and Madson said the last few years have been difficult.
“We have been extremely lucky we’ve managed to keep our head above water. We’re well stocked, our bills are paid, but it has not been easy,” Madson said.
Madson said that besides general difficulties brought on by the economy, Internet shopping has taken a chunk out of her business. She said it’s tough to put time into choosing developmentally appropriate toys for different age groups, organizing and displaying them, only to have some customers decide to buy the same toys online for cheaper.
“Years ago it was just a wonderful business to be in,” Madson said. “It was truly, truly joyful. But when you have to pinch every penny and watch every check you write it delivers a sting.”
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