And This Year, Consumers Will Be Focused on Getting Their Money’s Worth
With Black Friday just a few weeks away, there is no shortage of speculation about what this holiday season will bring for retailers and how the season will impact a still-sluggish economy. The consensus seems to be that consumers will likely spend about the same amount as last year, which is one of the factors retailers take into account when they say ‘good year’ is certainly a relative term.
The holidays are fast approaching, and in just a few weeks, Christmas shopping will begin in earnest. But this year, after people make their lists, they will be checking them twice as they focus on buying gifts that are practical or will last over time.
“People always find a way to celebrate the holidays with gifts, and as retailers, we will always be optimistic,” said Tamara Beauregard, vice president of Wilson’s Department store in Greenfield. “But we expect more purchases of things like sweaters, robes, down comforters, and well-made toys this year that are durable and educational, because people want to feel they are getting their money’s worth.”
Mina Lussier agreed. “Gift giving does not take a back seat. But what people choose during a tough economy is considered more carefully,” said the president of Zanna in Amherst, which sells women’s clothing, jewelry, and accessories. “A customer may still spend $300 on a gift for her daughter, but instead of buying something that isn’t practical, she might purchase a pair of boots that are useful, fashionable, and will stand the test of time.”

Mark Wineburg (left, with sales associate Julian Feller-Cohen) says the iPad 2 and MacBook Air are on many people’s holiday wish lists this year.
Diana Gisolfi, who owns the Sister’s Kids store in Springfield with her sisters, Rosa Falvo and Joanna Ferrentino, said her venture also expects to do “very well” this holiday season. But she noted quickly that this is definitely a relative term.

Diana Gisolfi (left) and Rosa Falvo say parents and grandparents have turned to toys with lasting value.
National survey results show that her expectations are right on the money. According to a Gallup poll conducted Oct. 6-9, the average American family expects to spend $712 this year on Christmas gifts, close to the $715 they estimated they would spend at this time last year. The figure is significantly lower than the $907 spent on average in 2007, and this year, only 54% of people polled say they will definitely spend as much as they did last year.
Present Tense
The economy grew 2.5% in the third quarter this year, which Karl Petrick says is considerably better than the first quarter, when growth was limited to 1 %.
“But the downside of that number means that we’re treading water,” said Petrick, assistant professor of Economics at Western New England College. “It is not a fast-enough growth rate to put a dent in unemployment, which is a primary concern when we are looking at consumer spending.”
More than 14 million people in the U.S. are unemployed, and that number reflects only those who have looked for work in the past four months, he explained. “It doesn’t capture the people who are working at a part-time job hoping for full-time work, people who have been unemployed for a significant amount of time, or the discouraged worker who has stopped looking. So you can basically double the rate to get a better picture of employment.”
What’s more, the average U.S. median family income has fallen to $47,000, and most wealth creation has been captured by the top 1%, meaning the general outlook is far from merry and bright.
Petrick says consumer confidence and spending are linked, and the most recent Gallup polls show that self-reported spending peaked in July at $74 a day. In September, it fell to $68 a day, and in September, the number went down to $65.
“The downward trend doesn’t bode well for Christmas shopping,” Petrick said. “Twenty-nine percent people of people in a recent poll said they would spend less than last year, while in 2010, only 15% said they planned to spend less than they did the previous year.”
However, shoppers can expect plenty of sales at most stores, and Beauregard said Wilson’s is no exception. “Most retailers will have a sale every week during the season because the big-box stores have trained customers to expect it,” she said.
To that end, local businesses are stocking their shelves with what Beauregard hails as the right items at the right prices.
“We have worked very hard to be able to offer shoppers the right selections,” she said, adding that well-known clothing brands such as North Face and the Melissa and Doug line of educational toys have become popular because they are well-made and will last for generations. “The holidays are important, but people’s choices will continue to be different,” she said. “They want to make their homes warm and comfortable, and gifts may include new comforters, throws for the couch, or warm robes, as people have turned down their thermostats.”
Games and arts and crafts top the list at Sister’s Kids. “Parents want to be able to sit down and do things with their children, especially during the holidays,” said Gisolfi. “And they are buying gifts that make sense. Sometimes less is more, and a game is something that can be played by two or three children or the whole family.”
But, thankfully, she says, she is in the right business when it comes to holiday gift giving. “Christmas is for children, and parents will buy the toys their children want.”
Wrap Music
The reduction in holiday sales since the economy went downhill has led to a decrease in the number of people hired for temporary positions at retail establishments, said Petrick, referencing another important aspect of the season — hiring, or a lack thereof, and its impact.
“Those jobs used to give a Christmas boost to the economy, as the workers would spend the money they made on gifts,” Petrick said. “But since retailers are more pessimistic, they are hiring fewer people, which reinforces the vicious cycle.”
Still, shop owners are doing all they can to encourage an upswing in sales, and as a result, layaways have made a comeback. “Stores advertised them last year, but this year it’s almost like a blitz,” Petrick said. “It’s a sign that many businesses are not very optimistic. By October, they were advertising that people could pay for things in monthly installments, and even the chain stores are bringing them back.”
Petrick said recent layoffs at MassMutual and Hasbro, coupled with news that Bank of America will let several thousand workers go across the country, has created a heightened sense of insecurity around employment, which makes people more cautious about spending and incurring debt. “It’s part of the reason why we will do well if we tread water this year,” he said, referring to holiday shopping. “This is a very challenging time.”
However, two measures could help. Right now, the extension for unemployment benefits and the 2% reduction in payroll (FICA) taxes for employees are set to end Dec. 31. “If Congress extends those two little lifelines, it certainly would improve the chances of retailers doing as least as well, if not slightly better, than last year,” Petrick said.
Despite the consumer-confidence index, retailers are optimistic. “This fall has been better than last year, and we are buoyed by that; our guests keep our business going,” said Lussier, adding that customers frequently ask how well her shop is doing because they don’t want to see it close. “We tell them it’s doing very well, but it’s because they are shopping. It’s a very symbiotic, person-to-person relationship.”
Zanna allows customers to create ‘wish lists,’ which the store keeps on file, so if husbands, boyfriends, or significant others come in to do their holiday shopping, they will know exactly what to purchase.
“And statistics show that, when women go shopping for gifts, 75% of the time they buy something for themselves,” Lussier said, explaining that she and her staff encourage the trend.
Mary Gancarz, regional manager for Hannoush Jewelers, said the chain also expects to see robust sales. “We are always excited going into Christmas. It is a lot of fun,” she said.
But like other retailers, Hannoush has adopted measures to ensure shoppers will find gifts at price points they can afford.
“We’ve brought in more silver styles,” she said, citing just one example. “Everyone is very aware of the price of gold, so we have shifted our focus and are carrying more sterling-silver lines and sterling silver combined with gold. White metal has been hot for the past decade, with platinum in the forefront, but the price of platinum and gold are almost neck and neck. So, to capitalize on the trend, we have gone to silver. We still carry gold and platinum, but we want to keep gift giving affordable for those who want to watch their budget.”
Gancarz says people have become very conscious about where they are shopping and what they are buying. “And with our reputation, they know what they are getting. So, tying it all together in a pretty package for Christmas, we will continue providing high-quality products because, when things get tight, people return to things they know in terms of gifts and service. They are careful and want to know they are not taking any risks.”

Tony Erceg says his dealership typically sells five to 10 vehicles each holiday season to buyers looking to treat themselves after years of putting their families first.
The buyers typically have wanted to own a Lexus for a long time, are in their late 40s to early 50s, and have finished putting their children through college, paid for their homes, and given to family members in other ways, but rarely treated themselves, Erceg explained. But even in families with high incomes, people are scaling back.
“They’re being conservative, and instead of buying a $60,000 brand-new vehicle, they may buy a $45,000 new vehicle or a certified, pre-owned one,” he said. “But sales are up, and December and Christmas are always a great season for us, as the holidays are promoted by Lexus, and we have a lot of incentive programs which will start in late November.
Bow Ties
Erceg said the Lexus holiday sales theme is “a “December to remember.”
It’s an appropriate motto for shoppers who will strive to purchase gifts this year that will not only be appreciated, but also used long beyond the Christmas season.
“People want to feel they are getting their money’s worth and value for every dollar,” said Beauregard. So, Santa’s sleigh will be piled with gifts again, but even stocking stuffers will be carefully chosen, as shoppers move from the realm of fads to selecting gifts with intrinsic value.






















