For Tom Saquella, a visit to the area mall this holiday season has been noticeably different from previous years.
“You don?t get that sense of energy. People aren?t bustling around from store to store,” said Saquella, president of the Maryland Retailers Association. “They?re not thinking about spending a lot of money.”
Such has been the struggle for malls, department stores and boutique retailers this holiday season. Economic factors such as the housing slump, the credit-market crunch and heightening gas prices have influenced consumers to pull back their spending and forced retailers to offer increased discounts and sales.
“I don?t think anyone expected a banner year,” said Richard Clinch, a University of Baltimore economist. “There are a lot of economic factors affecting sales. Consumers are feeling bad, and when they feel bad, they don?t spend.”
Still, retail industry sales increased 5.1 percent in November from last year and 1.2 percent seasonally adjusted from October, according to the U.S. Commerce Department. Analysts attributed the increase to heavy sales in the week following Thanksgiving and warned December could produce weaker results.
“Consumers were taking advantage of the promotional discounts that a lot of the retailers were offering,” Phil Rist, vice president of strategy for Ohio-based BIGresearch, said during a conference call with media and analysts last week. “They?re letting us know their spending will be promotionally driven.”
Rist said research has shown consumer confidence in December is as low as it?s been in the past five years.
“The consumers are under stress,” Rist said. “They?ll try to control the things in their life they can control. They can control their discretionary spending.”
Before Thanksgiving, the National Retail Federation, based in D.C., predicted holiday sales would increase 4 percent this year to $474.5 billion. The increase was expected to fall below the 10-year average of 4.8 percent and would be the slowest sales growth since 2002, when sales rose 1.3 percent.
Smaller retailers are feeling the pinch as well, said Bonnie Crockett, executive director of Federal Hill Main Street. The Baltimore nonprofit was formed in 2000 to revitalize the neighborhood?s business district.
“It?s been a hard season for everyone, not just retailers,” Crockett said. “This is the make-or-break time for all businesses.”
WHAT THEY?RE BUYING
In November:
» Sports, hobbies, books and music sales up 11.3 percent
» Clothing and accessories sales up 8.2 percent
» Electronics sales up 6.1 percent
» Furniture and home furnishings sales up 2.5 percent
Source: National Retail Federation
SEASONAL STRUGGLE
With the holiday shopping period in its final stretch, The Examiner looks at how retailers and consumers have fared in what was expected to be a slow season.
» Today: Economy has influenced shoppers to pull back spending.
» Tuesday: Retailers making final push with discounts, sales, events.
