Retailers Cautious as Season Opens
Retailers cautious as season opens
By Madeleine Benn
The outlook for regional retailers appears mixed this key holiday season.
Industry observers, local merchants and shoppers interviewed voiced differing expectations about spending during a time of the year that remains crucial for many retailers, as November and December has traditionally been when consumers have been most willing to open their wallets.
“We earn 30% of our overall revenue from the holiday season,” Debbie Roth of Plum Gift Boutique in Ventura said.
A report from the National Retail Federation, an industry trade group, says that 62% of holiday consumers agree it’s “important to spend on holiday gifts and celebrations and that they will do what they need to, even cutting back in other areas, so that their loved ones get to celebrate like they always do.”
“Our spending likely won’t change as we always go with tradition,” said Georgia Bowen, during a recent shopping trip on State Street in Santa Barbara.
Still, some projections for this season may not be as comforting as such businesses would hope.
“We are looking at a pullback this year in total spending” along the Central Coast, Mark Schniepp of the California Economic Forecast said, estimating a drop of about 5% from 2021.
Others industry observers are more optimistic. The National Retail Federation, the industry’s national trade association, said it expects an average increase nationally this year of 6% to 8% over the same period last year. This would exceed the average increase over the last 10 years of 4.9%.
Still, that would be markedly down from the last year’s 13.5% increase over 2020, whe the country began to open up from the height of the Covid-19 pandemic.
“Spending in 2020 and 2021 was at all-time record highs,” said Schniepp, “largely as a response to cabin fever.”
So some retailers say they can no longer afford to be so dependent on the Thanksgiving to Christmas shopping season and have been attempting to shift their business models.
“We depend heavily on this quarter, but we have also learned that it is not sustainable to only rely on these two months,” said Jen Steinwurtzel of Santa Barbara clothing and gifts retailer Jake & Jones.
“For us,” said Erik Purinton of San Luis Obispo’s pet food outlet Tails, “it’s just another month, but more decorated.”
Greatly responsible for the fall off in sales of small businesses have been online retailers. The National Retail Federation said it estimates consumers this year will spend 56% on their money online, with only 12% of shoppers spending money at specialty stores
Some local small businesses say they can weather this. “We don’t look at them as competitors,” said Roth of Plum, which curates specialty items. “We don’t worry about it, or rather we try not to worry about it.”
Purinton echoed Roth, saying, “We carry a diversity of products, so you won’t find them in your average Target, Amazon or a place like that.”
“No doubt these big boxes cut in,” said retailer Steinwurtzel. But, “no one likes opening an Amazon box on a holiday, no matter what is in the box. People want to feel thought of and that the gift came from somewhere special.”