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Retailers could step up freebies for shoppers
As holiday season heads into the last stretch, retailers are gauging just how much they have to give away to get skittish shoppers to spend.
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This holiday season, you can get free shipping nearly everywhere. Cheap iPhones at Best Buy. A chance to win a Fiat 500 at Banana Republic. Oh, and Macy’s will be open 48 straight hours before Christmas. But we could see bigger deals ahead.
“I think this week is really going to be the test,” says Patty Edwards, chief investment officer at Trutina Financial in Bellevue, Washington.
She says we’re entering prime time for the holiday shopping season.
“This is the week when we’re going to start to see retailers start do things they haven’t done in years past if they’re feeling the hurt and need to drive sales,” Edwards says.
Analysts expect holiday sales growth of about 4 percent this year. That’s slower than last year. New government numbers show consumer spending has been softer than expected.
Scott Tuhy of Moody’s Investors Service says that’s because Americans are worried about their jobs and are watching the fiscal cliff debate closely.
"Consumers may feel the need to be somewhat cautious if they’re somewhat uncertain on what their weekly paychecks will be in the next few weeks,” Tuhy says.
Most retailers have planned their holiday deals and inventory months in advance, so drastic last-minute price cuts are rare. Kathy Grannis of the National Retail Federation says stores might be reserving some deals for these final weeks.
“The promotions we’re going to see the next two weeks are going to be very geared to getting those last customer dollars and getting procrastinators into their doors,” says Grannis.
So, maybe the days of 70 percent off everything are gone, but holiday shopping might be one area where procrastinators win.
In this story about holiday spending, the comment is made that we grew by 4% over last year, followed by a quote from a Moody's Investor Service representative saying that it's because we're worried about our jobs and the fiscal cliff. We don't actually know the factors. An equally plasable explanation might be that, coming out of the Great Recession, consumers are realizing that going into debt over Christmas/Hannukah presents is not a wise thing to do. Please watch it when you quote people drawing conclusions about consumer (or investor) behavior. Your story leans to a (perhaps inadvertant) bias that the more people consume, the better.
