Moderate holiday gains expected this year

Moderate holiday gains expected this year
South Dakota's 2005 holiday season will likely mirror national trends, according to the South Dakota Retailers Association. That means that businesses can expect modest gains from last year.

"Our informal survey of 100 retailers throughout the state found that four out of ten (41 percent) are expecting this year's sales to be up from a year ago, with just over a third (35 percent) expecting sales to remain steady with last year's," says South Dakota Retailers Association Executive Director Jerry Wheeler. "Fifty-seven percent are predicting a good to excellent holiday season, which is down from last year at the same time, when 67 percent expected good to excellent holiday spending. Our findings appear to be in line with national projections."

The National Retail Federation (NRF) says on the heels of the strongest national holiday seasons in five years, retailers throughout the country can expect moderate holiday sales growth this year. According to NRF, total holiday retail sales are expected to increase 5 percent over last year, bringing nationwide holiday spending to $435.3 billion. In comparison, holiday sales last year rose 6.7 percent.

"A combination of many factors, including energy prices, the job market, disposable income, and consumer confidence, will ultimately affect retailers' sales this holiday season," said NRF Chief Economist Rosalind Wells. In addition, NRF says, the effects of Hurricane Katrina will play a role in the tempered outlook.

In South Dakota, nearly three-fourths of survey respondents indicated their customers were feeling cautious this year. A fourth (25 percent) said their customers were upbeat.

Retailers participating in the survey also showed reservations about the outlook for the nation's economy over the next six months, with 43 percent predicting the economy would decline (compared to 16 percent last year at the same time), and just 19 percent expecting an improved economy (compared to 50 percent last year at the same time).

At the same time, many retailers are expecting their customers to splurge on big ticket items, including the newest technology in home electronics. Winter-themed home decor will continue to be popular, as will CDs, DVDs, video games, winter apparel, jewelry, and small appliances.

Wheeler says comments on the surveys ranged from very negative to very positive.

While many business owners were troubled by the prospect of high fuel costs, Paul Sinclair of Liebe Drug in Milbank looked at it in a different light, stating, "We may have an opportunity to capitalize on high gas prices by keeping customers home to do their shopping."

Karen Palmer of Card and Candy Store in Pierre was also among those looking for a good season in spite of potential economic deterrents. "We always go into the season with a positive attitude," she noted. "We are heading into the Christmas season coming off another summer of drought conditions. This may effect spending by our farm and ranch customers."

However, Palmer added, "We were in the same situation last year and had a fairly good fourth quarter."

also sounded a positive note. "We expect a good Christmas. Fuel prices are high, but so are cattle prices," Casey noted. "As usual, our stores will be full of new merchandise. Christmas is always exciting at Casey's!"

David Jackson of Haegle's Western Wear in Sioux Falls, expressed a similar view, saying, "Every year is better."

Among those who were projecting lower sales this year, the primary factors cited were the ongoing war in Iraq, energy prices, public and private debt, increased competition, and natural disasters such as Hurricane Katrina causing a depressed mood in the country.

Many businesses in small communities are hoping Mother Nature will help out by dropping some heavy snow over the holiday season � since that tends to keep consumers shopping closer to home. Others are finding ways to improve sales on their own, including through increased promotions, and offering specialty items not available through other businesses in their area.

One-fifth of retail industry sales (19.9 percent) occur during the holiday season. The South Dakota Retailers Association is a 3,800-member statewide organization.

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