Shoppers focusing on home for the holiday retail season

By Melissa Westphal

BusinessRockford.com

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LOVES PARK — The crew at Ambrose Christmas Store believes shoppers have plenty of holiday spirit this season.

At least, compared with last year.

Ambrose is celebrating its 39th year in business — 30 years as an all-holiday retailer — and owner Ben Ambrose said customers use the festive trees and decor as motivation for the holidays.

“They come here to get in the spirit,” Ambrose said. “The holidays provide a little normality for the year, and I think people seem excited to get back to tradition.”

Consumer spending surveys weigh in favor of Ambrose’s predictions this year, as more people admit to feeling more like Tiny Tim than Scrooge.

Retail spending is projected to increase a few percentage points this season over last, but the way consumers open their wallets will differ this year, according to retail research firm Deloitte’s 24th annual holiday mood survey.

Conflicting attitudes
Seema Pajula, a partner with Deloitte’s retail practice, foresees “a tale of two consumers” during the holidays.

“Consumers are saving at record levels and paying down debt, so they’re still cautious,” Pajula said. “While some of our survey respondents said they were more positive and optimistic, nearly half said their financial situation is still worse this year than last year.”

Deloitte projects that gift spending will be down about 9 percent, but 52 percent of survey respondents said they plan to spend more money on socializing in their homes, which means buying more holiday decor items and food for guests.

“People are getting more into that holiday spirit this year and focusing on spending time with family and friends,” Pajula said. “Retailers are coming off the worst holiday season on record this year, so they’re smarter and more efficient this year.”

Finding fun in frugality
That’s good news to Ambrose, who said his store, at 6715 N. Second St., offers everything from custom-lit trees to ornaments of all stripes, ranging in price from 25 cents to $30.

Toni Castillo and daughter Maribel Davila stopped at Ambrose for the first time Thursday evening. They were shopping for quinceanera decor this week but they were already planning a second trip back for holiday shopping.

They said exchanging names among family members is how they save money during the season.

“I can’t see us ever buying for everybody,” Castillo said. “We’ll pick names again, and it’s fun to do that because you get different people, and we just like getting together.”

Industry experts say retailers will have less inventory on hand this year after getting stuck with so much leftover merchandise last year when the economy flatlined in October. Deep discounts from major retailers like Sears and Wal-Mart are already available, yet national survey results say people haven’t been motivated enough to wrap up their shopping yet.

Concern with value to stay
Pajula said consumers still are expecting significant discounts this year and are researching online before they buy, even tapping social media outlets for the availability of coupons. They’re still targeting discount stores more than ever for deals.

As the economy improves, trends will change, but in the near future, shoppers are focused on value, Pajula said.

“It has truly become a status symbol to say how little you spend versus how much more you spend,” Pajula said. “It used to be more about getting the great brand-name items. But the shock on Wall Street, the job losses ... the recession has really affected so many economic brackets. Value has become an extremely important part of consumers’ DNA.”

Gift cards’ fate unclear
Projections about discounts and inventory levels are often the only similarities between various national retail surveys and reports. Deloitte projects that gift cards will be the most popular gift item this year, but the National Retail Federation says there will be a dip in gift card sales this year because of the early discounts being offered by retailers.

The retail federation also reports more holiday shoppers plan to pay for gifts this year with cash and check/debit cards rather than rely on credit cards.

State and local governments that have scrambled to make up for lost sales tax funds this past year will know for sure how this holiday season affected their bottom lines come the first of the year. The state Department of Revenue doesn’t rely on guesstimates, spokeswoman Sue Hofer said.

Reach staff writer Melissa Westphal at mwestpha@rrstar.com or 815-987-1341.

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