The National Retail Federation predicts sales in November and December to rise 3.7 percent to $630.5 billion. That is above the average growth of 2.5 percent over the last decade, but below the increases of five and six percent in some years before the recession, which began in 2007.
While the economy is improving, consumers are facing sluggish wage growth, so when they shop, they tend to be looking for blockbuster deals.
But what do local Northern Arizona business owners and shoppers think?
Good economic indicators are reflected in the sale of big-ticket items such as fine jewelry, luxury cars, second homes and fabulous trips.
Monika Leuenberger, owner of Avenues of the World Travel, says she has clients right now, cruising down the Rhine for the express purpose of holiday shopping.
“They do a lot of holiday shopping on river cruises, where people can shop for Christmas items unique to each country,” she said.
And she has five more cabins booked within the next few weeks for the same trip.
Other indications in confidence in the economy are that travelers are staying in nicer hotels and paying to experience behind-the-scenes tours of the Vatican or the Eiffel Tower.
“Those experiences are in very high demand,” she said.
Leuenberger says her business began to recover in 2012 or 2013, but there has always been a strong confidence in travel in her clients in the $100,000 and up income bracket.
She said the events in France have had little effect on travel.
“We have people in Paris right now and they are reporting back that they are having a wonderful time. People still want to go. Those who are booked still want to go,” she said.
State department travel advisories are nothing new, but what they really mean is try to stay away from crowds and steering away from protests, she said.
Ryan Terhaar, co-owner of Frederick Fisher Jewelers, also says business is good.
“We’ve been doing very well,” he said.
He has noticed an increase in spending recently.
“Customers who had money have money again,” he said. “Our customers who were relaxing and saving their money are also spending again.”
He says he has seen holiday spending with consumers buying diamond rings and big colored stones like pink and blue sapphires.
Auto sales are brisk.
“Our business is very good,” said Noah Best, general sales manger of Terry Marxin Chevrolet. He says he is not sure if luxury vehicles are being sold elsewhere in the country.
“Up here, people are buying trucks,” he said.
He says business has steadily increased since he recession in 2008.
Experts have predicted that November is going to break all records for new auto sales, he notes.
While seasonable shopping seems to have started strong, it is uncertain yet how the threat of terrorist attacks will affect consumer confidence as the government is warning against travel and being in crowds.
“I’m not sure,” said Craig Van Slyke, dean of the W.A. Franke College of Business at Northern Arizona University. “With occurrences in France, I’m not sure I have a good feeling.”
He continued, “The economy seems to have stabilized, but it’s not entirely clear what the employment picture is.”
While unemployment seems to be down, there are people who have dropped out of the market given a somewhat stagnant picture.
“One thing will be interesting this shopping season. I think online retailers will do well if people are reluctant to go to the malls.”
According to leading business research and advisory firms, the top gifts consumers plan to buy are:
- 60 percent clothing or accessories
- 56 percent on gift cards or gift certificates
- 46 percent books, CDs, DVDs, videos and video games
- 41 percent toys
- 31 percent food or candy
Experts say they will shop in two main places this year, with 47 percent online and 42 percent in a retail store. About 35 percent of shoppers will be inspired from advertising circulars and 31 percent from television.
Shoppers will pay for their purchases in various ways: 39 percent will use a debit or check card; 38.2 percent with a credit card; 20.2 percent in cash; and 2.5 percent with a check. FBN