By George Anderson
Retailers are having visions other than dancing sugar plum fairies in their heads going into this holiday season. Higher household heating bills are on the way to consumers and discounting promises to be fierce, with the likes of Wal-Mart temporarily rolling back prices to make the competition’s head spin.
Wal-Mart will not be alone, say experts, as this holiday season will see some of the most aggressive price cutting in recent memory.
In fact, as Candace Corlett of WSL Stratregic Retail pointed out to the Denver Post, consumers needn’t even wait for Black Friday to begin saving. “We’re already seeing an explosion of very competitive pricing,” she said.
Wal-Mart has publicly expressed confidence heading into the holiday season that its price slashing ways will enable it to enjoy a merry Christmas, but others, including Target, have warned that the company and its shareholders may not get everything they wished for out of this holiday.
While the season may not turn out to be a spectacular success, industry groups have expressed confidence that sales for the Thanksgiving to New Year’s period will be an improvement over last year. The National Retail Federation (NRF) is looking for a five percent increase compared to last year, while the International Council of Shopping Centers (ICSC) predicts sales will improve in the three to 3.5 percent range.
Aubie Goldenberg, a partner in Ernst & Young’s retail group, said the nightmare scenario for retailers is consumers may decide that they cannot spend as much as they perhaps originally planned when heating bills arrive in the mail.
Moderator’s Comment: When all is said and done, will we find that consumers behaved differently (in terms of when they shopped) this year than in past
holiday sales periods? What effect will the early holiday advertising of retailers, such as Wal-Mart, Sears, etc., have on consumer shopping behavior? –
George Anderson – Moderator