Holiday season moves into high gear but challenges remain

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Excited by good hiring, good salary benefits and substantial savings, shoppers are returning to the store and splurge on all kinds of items

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NEW YORK – Buoyed by good hiring, good salary benefits and substantial savings, shoppers are returning to stores and splurge on all kinds of items.

But the big question is, how bad will their mood be this holiday season due to lack of supplies, high prices and staff issues?

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Americans, who are already tired of pandemic-induced social distancing policies, may grumpy if they can’t check off items on their holiday wish lists, or feel frustrated by skimpy holiday discounts. can be. Adding to their bad mood is the fact that many frustrated workers left it before the holidays, causing businesses to shrink during their busiest times of the year.

Shoppers are expected to pay an average of 5% to 17% more for toys, clothing, appliances, TVs and other purchases on Black Friday this year compared to last year, according to Aurelian Duthoit, senior sector advisor at Allianz Research. According to the research firm, TV prices will increase by an average of 17% compared to a year ago. This is because whatever discount would be available would be applicable to the already expensive goods.

Such disappointment could mute sales for the holiday season that are record-breaking.

The National Retail Federation, the nation’s largest retail trade group, predicts that holiday sales will increase between 8.5% and 10.5% compared to the 2020 holiday period, when shoppers, closed during the early part of the pandemic Gaya, spent his money on pajamas and household items. – Mostly online. Holiday sales grew 8.2% in 2020.

“I think it’s going to be a messy holiday season,” said Neil Saunders, managing director of GlobalData Retail. It will be a bit disappointing for retailers, consumers and workers. We are going to see long lines. We’re going to visit the Messier store. As you take orders online, we see delays.”

Jill Renslow, executive vice president of business development and marketing for the nation’s largest mall, Mall of America, expects Black Friday customers to be close to 2019 levels and said its store’s tenants “power shopping” earlier in the season. are seeing. But she acknowledged that mall tenants have clashed with staff and as a result, the center will open two hours later and close an hour earlier on Black Friday.

“They (retailers) are doing everything they can to deliver a great guest experience,” Renslow said. “But consumers need to be patient and be aware that the lines can get a little long.”

Still, don’t discount the flexibility of shoppers who have shown signs of celebrating the holiday last year after silent celebrations.

Kathleen Weber, a 58-year-old college professor who lives in Yardley, Pennsylvania, said she’s going back to big family gatherings for the holidays and will buy more gifts after only spending the holidays with her husband and three kids last year.

Weber, a large online shopper, said, “Everyone is so happy to be together, and that’s why we want to celebrate. But the fear of shortages is driving her to finish her holiday shopping by the end of next week; usually , she used to wait till December 21st to end her online purchases.

Retailers have also proven resilient.

When the pandemic forced non-essential stores to close for several months during the spring of 2020, pundits feared the death of department store and apparel chains. Several reputable retailers that were already struggling to reorganize in bankruptcy include Neiman Marcus, JC Penney and Brooks Brothers. Meanwhile, only big box retailers such as Walmart and Target were allowed to remain open.

But many retailers have since returned to a healthier financial position. The percentage of U.S. retailers defaulting on their debt rose 20% last year, compared to 6% for all corporate issuers, according to S&P Global Ratings. This year, it is less than 2%.

Store closures have also taken off, a reversal of the bleak picture in 2020. Global research firm, CoreSight Research, says retailers in the US have announced 5,057 store closures for the year, but the number of store openings as of November 19 stands at 5,103. CoreSight Research predicted in June 2020 that about 25,000 stores would close last year, but the number was actually more than 8,000.

Companies that were able to survive the pandemic were also able to pivot quickly. Many changed their offerings from flashy clothing to casual wear, and department stores such as Macy’s never provided such services as curbside pickup when suddenly they launched. Others got rid of places where they lost their money.

Some of the changes introduced due to necessity in 2020 appear to be here to stay, including offering big holiday discounts earlier in October to smooth out peaks in online ordering, and taking away Thanksgiving Day store shopping and deals. Instead of taking customers online. ,

And while pandemic-induced disruptions in supply networks have reduced the inventory needed to meet shoppers’ demands, such shortfalls have also proved to be a silver lining. Linear inventory has brought some pricing power back to retailers that have been locked in a vicious cycle of discounts for years. Such non-stop promotions have eroded profits.

Ken Perkins, president of Retail Metrics LLC, said, “Even with rising labor costs and increasing supply chain costs, retail earnings have been pretty decent, noting that when the pandemic hit, it looked like it was going to happen.” The sky was falling and retailers would never see profits again.”


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