The holiday shopping season may be a hit for shoppers taking advantage of deals and discounts, but it's expected to be mediocre at best for retailers.
Retail industry watchers interviewed by BusinessWeekly expect a puny 2 to 3 percent increase in holiday sales, a bit less than shopping prognosticators at large, who are expecting closer to 4 percent.
With the gross domestic product growing at 2 percent, retailers can't expect much more growth than that, said Howard Davidowitz, of Davidowitz & Associates Inc., a consulting and investment firm working with retailers.
"If consumers are 70 percent of the GDP, then retailing can be more than 2 percent," Mr. Davidowitz said. "This is arithmetic."
It's hard to keep spirits bright in a slow recovery with naggingly high unemployment, said Anthony Liuzzo, Ph.D., professor of business an economics at Wilkes University.
"While consumer sentiments are somewhat improved, there remains a lack of confidence in the nation's recovery," he said. "Housing is still down, stock market is volatile - things aren't terrible, but they certainly aren't great."
Dr. Liuzzo almost increased his projection when he saw peers come around 4 percent. Then Superstorm Sandy hit the East Coast. As millions recover from the damage or survey their newly purchased, if unused, generators, they aren't thinking about holiday shopping.
"Sandy hit millions in the pocketbook, and it will hurt holiday sales," Dr. Liuzzo said.
Retailers are positioning themselves to compete for consumers dollars by shifting attention online and extending the holiday shopping season, offering deals sooner than their peers.
Bricks-and-mortar stores are improving their online presence as more people comparison shop using mobile apps or just surfing on the Internet. Mr. Davidowitz said that while e-commerce remains a bright spot in retailing, which will grow 15 percent a year, he believes, for the foreseeable future. Wal-Mart recently acquired several tech and online retail businesses and opened @WalmartLabs in the Silicon Valley to hone its online sales ability, app strategy and social networking. Many retailers are using their stores as pickup locations for products bought online. Thousands of online retailers are joining "Free Shipping Day" hoping to snag 11th hour shoppers Monday, Dec. 17.
Once the kick-off for the holiday shopping season, Black Friday is being eclipsed by earlier and earlier openings. Wal-Mart, Target, Toys R' Us, Sears and other big players will open Thanksgiving - and stay open into Black Friday, hoping to cash in on shoppers' tryptophan high.
No matter how or when they sell, the rule of the day will be deals and discounts. Off-prices stores, such as TJ Maxx and Ross and the deep discounters such as Dollar General, Family Dollar, will probably be winners, Mr. Davidowitz said. Specialty stores and department stores will have a much more difficult time hitting their store goals, he said.
All the promotions, doorbusters, blowouts and specials don't do much to convince consumers to spend more, just where to spend it.
"Stores have to promote and do the things they do during the holidays, otherwise their competitors will eat their lunch," Dr. Liuzzo said. "They aren't making the pie larger, just preserving their piece of the pie."
Contact the writer: dfalchek@timesshamrock.com