NEW YORK — Everything from the weather to pent-up consumer demand and an improving economy are giving rise to the anticipation of a happy and healthy holiday season, but the real gains might arrive during the post-holiday sales period.
According to the retail research team at Merrill Lynch & Co., which co-sponsored a holiday outlook presentation with the Retail Marketing Society Wednesday at the Fashion Institute of Technology, consumers are ready to shop.
Daniel Barry, managing director at Merrill Lynch, told attendees that improving sales momentum and easy comparisons virtually guarantee a strong Christmas selling season, which he expects to be among the best in the past decade. Also boosting momentum will be one extra shopping day this year against the loss of six days last year.
For the broadline retailers that Barry tracks, he expects as much as a 3 percent comparable-store sales gain. “Consumers this year are going to have a lot of fun,” he said. Sales are expected to be strong in November and December, with good sell-through early in the season at full markup.
While Barry expects the holiday season to have its usual number of promotions, he noted that those are likely to be carefully planned by the retailers.
More importantly, he commented during the question-and-answer period, there is continued growth in the volume of shopping that is done after the holidays.
Mark Friedman, first vice president at Merrill, expects comps for specialty retailers to be up 3 percent, and said that for some, earnings can rise as much as 19 percent.
Because consumers in the past 24 months were not in the mood for frivolity, Friedman anticipates that they are now ready to “splurge.” And significantly, consumers are ready to spend on themselves.
“Sales of novelty and fashion sold at full price suggest that consumers are interested in fashion, and [could be] more willing to spend on themselves while looking for holiday presents,” the analyst said.
He expects items like hoodies, jewelry and cashmere sweaters to be top sellers. Accessories will be a bigger part of the merchandise mix this year as retailers realize that those items are easy to sell since they don’t present sizing issues. Friedman even went so far as to predict that “ponchos, a fall item, could be the sleeper hit” of the season.Other key items for holiday, according to Jane Hali of Ampersand Consulting, a division of Here & There, will be merchandise reflecting either “charm school” or “sexy siren” looks. Besides old-fashioned elegance versus body-skimming sheers, another holiday trend is fur, which Hali said is hotter than ever.
She expects to see a lot of fur vests on the sales floor for holiday, either fake or real. “We had $1.7 billion in retail sales of fur in 2002, the biggest year since 1986, [and] 2003 will be even better,” she predicted.
Not to be outdone is the pop of color on the sales floor. Pink, which emerged during the spring season, “hasn’t peaked and will be with us for awhile.” Plum, along with mauve and purple, will also be hot.
Separately, Deloitte’s 18th annual holiday survey said, non-auto consumer spending in November through December is projected to climb 6.5 percent, with purchases of apparel, furniture and general merchandise growing at a still faster clip.
Growth at that level would mark the strongest increase since a 9.2 percent surge in 1999 and represent a 44 percent hop over the 4.5 percent upswing in fourth-quarter spending in 2002. It would also spell the third strongest fourth-quarter sales advance in the past 10 years, topped only by a 7.4 percent increase in 1994 and the result in 1999.
As for holiday gift spending during the fourth quarter, those polled said they’d spend $561, on average, up 3.3 percent from the $543 they budgeted during holiday 2002. More than two-thirds, or 67 percent, said they’d spend more than or the same as last year, up from 64 percent in 2002 and 66 percent in 2001.
Apparel is anticipated to retain its place as the most popular holiday purchase, as 70 percent of the 17,000 respondents to Deloitte’s survey said they’d give it as a gift, up from 64 percent a year ago. Apparel will be followed by DVDs and CDs, gift cards and books as the most frequently purchased holiday gifts, according to those polled.
Although gift cards dropped from the second most popular planned gift purchase last year, to the third spot this season, 60 percent of consumers still said they planned to give them, up from 49 percent in 2000. And those cards will help extend holiday shopping activity beyond Dec. 25, noted Tara Weiner, national managing partner of the consumer business practice at Deloitte.“Our survey suggests 12 percent of holiday spending will occur after Dec. 25, particularly with the growing popularity of gift cards,” Weiner said. “It’s come to be seen as a more personal item than it used to be — one that allows for more personal choice, minimizes the potential for returns and boosts the season’s business potential for retailers. People often spend more than the value of the card,” Weiner added.
The Internet and traditional department stores are likely to realize the greatest pickup in fourth-quarter shopping, Deloitte found, with 50 percent of those surveyed saying they’ll shop traditional department stores, up from 41 percent a year ago, and 56 percent signaling plans to shop online, up from 49 percent. Further, those polled said they’d spend about one-fifth of their holiday budget online this season.
Alberta Ferretti's "Rainbow Week" sweaters are back. The designer closed her #MFW show with a few day-of-the-week sweaters, which first debuted on the catwalk last January as part of the pre-fall 2017 collection. #wwdfashion (📷: @delphineachard)