Holiday Cheer: Local merchants jolly over holiday sales figures

Economic forecasts and local store receipts indicate consumer spending this holiday season may bode well for southwest Missouri's retail outlets.

With predictions of 4 percent to 6 percent growth in retail sales for the 2003 holiday season, and local merchants generally reporting improved results for day-after-Thanksgiving sales compared to last year, the retail sector is cautiously optimistic.

Sales the day after Thanksgiving were OK but not spectacular, said Kelly Meier, co-manager at Fashion Bug, 2633 N. Kansas Expwy. "It wasn't as busy as we wanted it to be," she said, but added that since then, sales have increased.

The eight-employee store has its real sales boom two weeks before Christmas, Meier said. Store receipts are up about 2 percent over what they were this time last year, she added.

At The Gap, the majority of clothing sales for the year are done in November and December, said Kristen Reaves, assistant manager of The Gap at Battlefield Mall.

Store sales are tallied from mid-November when the store begins receiving holiday merchandise, Reaves added. The 5,500-square-foot store, which employs 37, has operated in Battlefield Mall for more than 10 years. The company has more than 2,000 stores nationwide.

Nationally, Gap Inc. reported that its total sales for November were up 7 percent, to $1.4 billion, compared to $1.3 billion a year ago. Comparable store sales for November increased 6 percent compared to a 9 percent increase a year ago, according to a Gap news release. Year-to-date, the company's net sales of $12.4 billion represent an increase of 11 percent over last year's $11.1 billion. Year-to-date comparable store sales are up 9 percent this year, compared with a decrease of 6 percent last year.

Bill Smillie, owner Smillie's IGA, a 12,500-square-foot grocery store at 1421 S. Glenstone Ave., said his store is not a "big holiday store" when compared to other, larger grocery enterprises. Still, it experiences a 15 percent to 20 percent increase in its average sales for the five-week period closing out the year, he added.

Special orders sold to commercial accounts such as hams, turkeys and fruit baskets for employees boost sales as well, Smillie said. Overall, 2003 sales are beating last year's numbers by about 5 percent, he added.

Just For Him generates roughly 40 percent of its annual receipts in December, said Robert Gravett, who co-owns the 15-year-old store along with his wife, Judy. The specialty store at 1334 E. Battlefield sells gift items including chess sets, globes, humidors and a variety of tobacco-related products.

Robert Gravett said the store was already running at about a 5 percent to 10 percent increase in monthly sales before December began, adding that some of that volume was due to increased Web site sales. About 60 percent of the store's total revenue comes from merchandise related to smoking, he added.

Seventeen-year-old Sam's Club at 3660 E. Sunshine has the small-business member as its primary focus, said Ralph Wright, business manager. The first weekend before Thanksgiving launches the store's holiday season because of its food offerings, he added. While not disclosing any revenue figures, he said 2003 sales figures are above last year.

Sam's Club employs 290 and operates out of 135,000 square feet, Wright added.

However, its sister retailer, Wal-Mart, reported its one-day total for the Friday after Thanksgiving was $1.52 billion. Corporate spokesperson Sharon Weber said the number represented transactions from 2,966 stores nationwide, but did not include Sam's Club's 532 stores. Top sellers were toys, electronics and appliances, she added.

This year's total eclipsed 2002's same day total of $1.43 billion, Weber added.

Jeff Newlin, co-owner of Play It Again Sports at 1300 E. Battlefield Road, said sales the day after Thanksgiving were good and comparable to last year, but wouldn't term them "great." New product accounts for about 75 percent of sales, used is about 25 percent, he said. The store employs 18.

"I think people are a little more cautious this year. Newlin said. Items moving best in December seem sparked by New Year's resolutions. Fitness equipment, treadmills, home gyms all move well this time of year, he added.

The store typically has its best months in March, April and May due to strong local softball and baseball interest, Newlin said, who's already got about $150,000 of related merchandise in house for 2004. 2003 sales are about 18 percent over what they were last year at the same time, he added.

Newlin and co-owner, Jeff Salyers, are opening a new 6,600-square-foot Play It Again Sports in Bentonville, Ark., at the end of January.

Forecasts

The Washington-based National Retail Federation is predicting 5.7 percent growth in November and December sales for 2003 over 2002 in general merchandise categories, excluding food and car buys, according to Ellen Tolley, NRF spokesperson.

In 2002, NRF predicted growth at about 3.5 percent against 2001, while the actual sales figure was 2.2 percent, Tolley said. The 5.7 percent growth, if materialized, would bring holiday spending to approximately $217.4 billion, according to NRF's Web site.

Optimism toward consumer spending stems from additional dollars in consumer pockets as a result of tax cuts and improved stock performance, Tolley added. Widespread concern over terrorism, the war and the state of the economy is reduced too, she added.

Expecting Springfield's Christmas sales to be good, but not necessarily along the order of the national retail rebound, Tom Wyrick, economics professor at Southwest Missouri State University, said it's too early to tell but it would likely be less than any national gains.

Though Springfield's economy is improving, it didn't experience a very deep recession either, Wyrick said. Rising consumer confidence, refinancing, lower interest rates, and the return of some to the work force should help bolster retail coffers, he added. "I really don't see anything getting in the way here in Springfield above having a decent Christmas shopping season."

Regarding the job market, Tolley is optimistic. "It looks like business investments are up, which means that businesses are hiring more people. And that really runs the gamut. Retailers hired about 750,000 seasonal employees for the holiday season." This number is based on 2002 figures and NRF thinks 2003 will roughly match that, she added.

Steve Spiwak, senior economist with Retail Forward, an Ohio-based research firm, expects growth of about 4 percent in the fourth quarter, which will top last year's 3 percent rise. This increase is "about half the pace logged during the 1999 holiday season, which was the strongest of the past decade."

Regarding recent tax cuts infusing capital into consumer pockets, Wyrick said that impact was negligible since they were of a temporary nature. "I think most of that money has already worked its way into the economy. The good news is that that helped bring the recession to a little bit earlier end than it would have been, so I think that those tax cuts are helping the economy and that will help Christmas shopping."

For general merchandise buys, a 4 percent to 6 percent jump in sales is possible, said David Overfelt, president of the Missouri Retailers Association. Sales activity was strong the day after Thanksgiving, known as "Black Friday," because it's the day retailers hope to make the transition from being in the red to being into the black for the year, he added.

Southwest Missouri would likely follow national trends of retail activity, Overfelt said. Tourism revenues have helped insulate southwest Missouri from some of the negative economic impacts other parts of the state may have experienced recently, he added.

"The big wild card is the job market," said Spiwak, who added that the 250,000 jobs created in the last three months reflect a "modest rebound," which is "the strongest showing since the last quarter of 2000." Most of the jobs were added in the retail and service sectors, he added.

While expecting neither blowout nor bust this holiday season, Spiwak cited some threats to the forecast. Consumer debt loads where heightened amounts of disposable income are spent on paying down items like mortgages, credit cards and insurance premiums could dampen the cash flow toward purchases, he said. Higher gas prices lessen the availability of holiday cash, too, he added.

Cautionary note

The unfortunate variable regarding the holiday season is terrorist activity, Wyrick said. "Of course, the terrorists would love to do something on Christmas day or that interrupts (the) Christmas season, so you've got that uncertainty, that unknown." If anything does occur, he added, its proximity wouldn't likely be nearby and would impact Springfield "through confidence as opposed to direct impact."