When it comes to stocking inventory for the holiday shopping season, Shelly Johnston is thinking year-round.
Instead of ordering items bearing the likeness of St. Nick or wishing a merry yuletide, the owner of the Open Window in Gloversville picked items her customers might seek long after all of the tinsel and garland are packed away. Like many small shop owners across the Capital Region, Johnston decided to order less this year to protect her business amid the recent economic turmoil.
“I don’t overbuy with that kind of thing anymore because otherwise you put it on sale at the end of the year and give it all away,” she said. “This year, that’s the way we’re going.”
In fact, it’s the way many retailers are going with their holiday inventory. Many business owners are taking a more conservative approach instead of keeping their stockrooms packed.
And they have plenty of good reasons for holding back on their orders. The U.S. Commerce Department released a survey Wednesday indicating that retail trade sales dropped 1.2 percent in September, almost double what analysts had initially predicted.
The report seemed to confirm investor fears of an imminent recession and precipitated a sell-off on Wall Street. The Dow Jones industrials ended down more than 733 points, representing the largest decline since its record-setting plunge in late September.
Earlier this month, the National Retail Federation predicted that sales for November and December will increase by only 2.2 percent. The slight increase is about half the 10-year average and the lowest jump since 2002.
The federation also announced that the cargo volume at the nation’s major retail ports declined to its lowest level in nearly three years. This lull in shipping was attributed to retailers more carefully managing their inventories in response to the anemic economy.
“Retailers went into the holiday season with their eyes wide open,” federation spokeswoman Ellen Davis said. “When no one is buying very much, the worst thing you can do is order too much.”
Though the Retail Council of New York State has yet to release its forecast for holiday sales, spokeswoman Rebecca Flach said she can sense angst among many retailers. She said some were already indicating that they would pare down their normal inventory.
“There’s certainly anxiety about what the holiday season is going to present,” she said.
Flach said some retailers have indicated that they would trim the number of luxury items they carry in anticipation that an increasing number of consumers will be cost-conscious this year. She suspected that the demand for expensive electronics might fade.
However, the less-than-rosy retail forecast could end up benefiting shoppers in the end. With consumers expected to spend less money, some retailers are likely to attract business by offering promotional bargains.
“It will be an exceptional promotion-driven holiday,” Flach said.
Internet retailers may also make a push for a larger piece of the action. Flach anticipates some online services offering deals on shipping.
“Internet sales may be the salvation of the season,” she said.
Others are hoping that holiday shoppers do their purchasing at local businesses instead of at large commercial retailers. In mid-November, Capital District Local First will sponsor its second “Buy Local Bash” in Troy.
Susan Taylor, Local First chairwoman and owner of the Book House in Albany, said area small businesses need local support this season now more than ever. Without strong sales this year, she said some area businesses might not make it.
“It’s time to support your local businesses if you want them to be there,” she said.
Similarly, the Downtown Schenectady Improvement District is hoping shoppers will see the benefit of supporting the city’s local businesses. Executive Director James Salengo said the district will launch a cooperative advertising campaign around Thanksgiving that will run until the New Year, urging shoppers to explore the downtown area.
“Everybody is cautiously optimistic that when people do decide to spend money, they’ll spend it downtown,” he said.
Members of the Saratoga Springs Downtown Business Association are hoping that Saratoga Springs’ annual Victorian Streetwalk in December will help bolster local sales. For the second year, the DBA will offer a special bag that holiday shoppers can purchase and use to receive 20 percent discounts the week after the streetwalk.
But DBA president Dawn Oesch said many Saratoga Springs retailers are hunkering down for below-average holiday sales this year. Talking to fellow business owners, she’s found that many are ordering less and making plans to reorder if they run short.
“We’re always optimistic, but you never know,” she said.