Retailers are launching seasonal sales earlier this year and adding more promotions as they grapple with a shorter-than-usual holiday shopping period and skittish consumers in the midst of the U.S. elections.
The retail industry is expected to see less growth in holiday spending this year than last year, forcing companies like Macy’s, Lululemon Athletica, Skechers and Academy Sports & Outdoors to take reactive measures. According to the Wall Street Journal.
Spending in November and December is expected to rise between 2.5% to 3.5% to $979.5 billion to $989 billion, according to the National Retail Federation forecast.
According to the NRF, this increase is less than the 3.9% increase last year and the 4.7% increase in 2022.
Hesitancy has increased among consumers facing cash crunch before the presidential elections. Consumer confidence unexpectedly fell in October, according to the University of Michigan’s Consumer Sentiment Index.
This hesitation, combined with a shorter-than-usual holiday period – with five fewer shopping days between Thanksgiving and Christmas – poses a new threat to struggling retailers.
“There are fewer days, so those days have more significance,” Chuck Groome, senior retail analyst at Gordon Haskett, told the Journal.
Shoppers are planning to look for deals this year, with 62% of Americans saying they expect to feel financial stress this holiday season, according to a Bank of America survey.
Nearly six in 10 survey participants said they plan to do more of their winter shopping at discount stores than last year.
That’s why Academy Sports & Outdoors is offering the sale early this year in November to maximize the number of holiday shopping days, Academy Chief Financial Officer Carl Ford told the Journal.
The move, Ford said, is an effort to cater to the company’s largely middle-income consumer base, which is increasingly using credit cards or using buy now, pay later options at check-out. Have been.
“They’ve been budget-conscious for some time,” he told the Journal. “I don’t think it’s going to magically get better.”
Academy has reined in its discounts in recent years and focused on specific sales seasons like back-to-school and Memorial Day to land deals. But academy promotions will ramp up again this holiday season, Ford said.
Sneaker brand Skechers is focusing on innovation to win over customers during the highly competitive holiday season. CFO John Vandemoer told the Journal that the company is launching several new items, including some collaborations with farm equipment supplier John Deere, new golf shoes and slip-in footwear options.
“You could argue that we over-innovate by testing too many things to see what works,” Vandemoer said. “But the current environment tells us we cannot stop.”
Vandemoer said he doesn’t expect “strong holiday growth” this year.
Department store Macy’s — which also owns Bloomingdale’s and luxury cosmetics company Bluemercury — is adding beauty and fragrance gift sets and festive apparel to its holiday collection in hopes of boosting sales.
Macy’s executives said at the Goldman Sachs Global Retailing Conference last month that Macy’s has added 40% new products across categories this holiday season and will expand its usual holiday deals to apply to more items.
Women’s sports apparel retailer Lululemon is adding more seasonal colors and styles to its offerings this year, executives said.
But the company still expects its revenue to decline by about 3% due to the subdued holiday shopping season.
An oversaturated retail environment with lots of promotions won’t persuade cost-conscious customers to spend big, said Hitha Herzog, chief research officer at H Squared Research and part-time faculty at Parsons School of Design.
“Prices of basic commodities like groceries, fuel and clothes remain high. “Sticker shock does not bode well for discretionary purchasing, especially during the holidays.” Herzog previously told The Post,
“If the consumer has to choose between paying for Thanksgiving dinner or participating in Black Friday shopping, the consumer will allocate his or her budget to food versus gifts,” she said.
