Retailers are launching seasonal sales earlier this year and adding more promotions as they scramble in a shorter-than-usual holiday shopping period and grapple with skittish consumers in the middle of the US elections.
The retail industry is expected to see less of a boost in holiday spending this year than it did last year, pushing companies like Macy’s, Lululemon Athletica, Skechers and Academy Sports & Outdoors to take counteractive measures, according to The Wall Street Journal.
Spending in November and December will likely increase between 2.5% and 3.5% for a total between $979.5 billion and $989 billion, according to a forecast from the National Retail Federation.
That growth is down from a 3.9% increase last year and a 4.7% boost in 2022, according to the NRF.
Cash-strapped consumers have grown increasingly hesitant ahead of the presidential election. Consumer confidence fell unexpectedly in October, according to the University of Michigan’s index of consumer sentiment.
That hesitancy coupled with a shorter-than-usual holiday period – with five fewer shopping days between Thanksgiving and Christmas – poses a new threat to struggling retailers.
“The number of days is lower, so the importance on those days is greater,” Chuck Grom, a senior retail analyst at Gordon Haskett, told the Journal.
Shoppers plan to seek deals this year, with 62% of Americans saying they anticipate feeling financial strain 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 they did last year.
So Academy Sports & Outdoors is offering sales earlier this year, in November, to maximize the number of holiday shopping days, Academy Chief Financial Officer Carl Ford told the Journal.
The move is an attempt to cater to the company’s largely middle-income consumer base, who are increasingly using credit cards or buy now, pay later options at the check-out, Ford said.
“They’ve been budget-conscious for a while,” he told the Journal. “I don’t think that that’s going to magically get better.”
Academy has reined in its discounting in recent years, focusing on specific sales seasons like back-to-school and Memorial Day to launch deals. But Academy’s promotions will pick up again this holiday season, Ford said.
Sneakers brand Skechers is focusing on innovation to win over customers during an ultra-competitive holiday season. The company is launching a slew of new items, including some collaborations with farm equipment supplier John Deere, new golf shoes and slip-in footwear options, CFO John Vandemore told the Journal.
“You could argue that we over-innovate to test a lot of things to see what works,” Vandemore said. “But the current environment tells us that we can’t stop.”
Vandemore said he does not expect “robust 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 added 40% new products across categories this holiday season and will expand its usual holiday deals to apply to more goods, Macy’s executives said at the Goldman Sachs Global Retailing Conference last month.
Women’s sporting apparel retailer Lululemon is adding more seasonal colors and styles to its offerings this year, executives have said.
But the company is still expecting roughly a 3% hit to its revenue because of the shorter holiday shopping season.
Hitha Herzog, chief research officer at H Squared Research and part-time faculty at Parsons School of Design, said an oversaturated retail environment with tons of promotions will not convince cost-conscious customers to spend big.
“Prices remain high for basic items such as groceries, fuel and clothing. Sticker shock does not bode well for discretionary purchases specifically around 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 their budget towards food versus gifts,” she said.
[Notigroup Newsroom in collaboration with other media outlets, with information from the following sources]
