“Recent news on the consumer front has been favorable,” he said. “Many retailers have already started hard and deep price-discounting, and a significant number of chain stores are planning on opening their doors on Thanksgiving Day,” giving consumers more time to shop before Christmas.
But several “caveats” have prompted IHS to lower its projection for holiday sales growth to 3.9 percent from 4.5 percent, including lingering effects from the superstorm and the possibility that consumers could get rattled by another round of congressional grandstanding and discord in December.
“It is obvious that Hurricane Sandy has blown the retail sales momentum off course,” Mr. Christopher said.
A dip in consumer sentiment from a five-year high after the election suggests consumers are starting to focus more on the fight over the fiscal cliff, which has the potential to crimp their buying power, he said. Any failure by Congress to resolve differences over expiring tax cuts, for example, could result in significant tax increases in January for everyone who pays income and payroll taxes.
“If there is significant political bickering and finger-pointing over fiscal cliff issues, consumer confidence and holiday spending may take a hit,” Mr. Christopher said.
So far, consumers have paid little heed to the political clash.
“Consumers appear to be in better spirits than last year,” with households planning to spend an average of $521 on gifts this season, said Lynn Franco, an economist at the Conference Board. As was seen during the recession, consumers will continue looking for deep discounts and bargains, and many will buy their gifts online to get the best deals, she said.
With consumers able to buy at any hour of the day online, bricks-and-mortar retailers in recent years have responded by launching the shopping season increasingly early with hard-to-resist bargains — like Wal-Mart Stores Inc.’s offer of $399 Apple iPad 2s with a $75 Wal-Mart gift card to anyone who lines up at its stores between 10 p.m. and 11 p.m. on Thanksgiving Day.
“Retailers are under immense pressure to get the holiday shopping season off to a strong start. It is the busiest time of the year for them and ‘Black Friday’ is so named because it is the day when most retailers’ sales move ‘into the black’ for the year,” said John Challenger, chief executive of Challenger, Gray & Christmas Inc., a Chicago outplacement firm. With the stakes so high, “they are all compelled to find whatever edge they can to get shoppers into their stores.”
The advent of sales on Thanksgiving has left some employees disgruntled and turned off some consumers who say the holiday should be spent with families, not shopping. But it has led to earlier hiring by retailers and more plentiful jobs, he said. Challenger is predicting seasonal hiring of more than 660,200 workers this year, and already in September and October, stores announced openings that amount to two-thirds of that total.
“From a job-seekers’ perspective, the earlier openings are a good thing,” Mr. Challenger said. Though “as the newest additions to the staff, these seasonal workers should be prepared for the fact that they will be the most likely employees to work on Thanksgiving.”
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