Index bodes well for the holidays
Independent spirit: Survey shows consumer confidence rising, however retailers are guardedly optimistic about upcoming year-end shopping season
Area retailers said they are hoping that rising consumer confidence will carry through the holiday shopping season and produce better results at the cash register than they saw last year.
The economic malaise and an unemployment rate of about 10 percent in the last quarter of 2009 forced merchants to slash their prices to lure shoppers, but in many cases they still fell short of their sales goals.
This time, however, there may be more reason for optimism, based on results of the Thomson Reuters/University of Michigan preliminary sentiment index, which shows that the outlook of U.S. consumers improved in November to its highest level since June.
The survey results bode well for retailers, who typically see more shoppers come through their doors as consumer confidence rises.
Joe Gradia, general manager of Shelton-based Hawley Lane Shoes' stores in Shelton, Norwalk and Stamford, said he believes people, tired of limiting their spending, may be more willing to open their wallets this season.
"I think they've been reserved for the past few years. We're hoping for a solid fourth quarter. Things are looking up. The numbers are showing that," he said, noting that the family-run chain added five employees last month.
"We've seen a very slight uptick in business in the last 60 days. We're cautiously optimistic for the holidays, but it's not where it was three or four years ago," he said, adding that the consumer confidence report provides hope for retailers.
Although the sentiment index is a bellweather for some, Craig Johnson, president of Customer Growth Partners in New Canaan, puts more faith in basics such as employment levels -- and based on what he sees, retailers will have a better holiday season this year.
Johnson estimated that 900,000 more Americans have jobs this year compared with 2009, when 130 million Americans were working. The unemployment rate in October was 9.6 percent, a slight improvement over 10.2 percent in October 2009.
More InformationMerchants upbeat about sales
"We think holiday sales will be up this year. We're predicting up 4.5 percent," he said. "It's not going to be a great Christmas, but it will be the best year-over-year growth since 2005."
At Agabhumi Bali in Stamford and Westport, a retailer that offers exotic items from Bali, spirits are high because a road project in front of its Stamford store on Magee Avenue is nearly complete, and the economy is trending up.
"People are coming into the stores a little more light-hearted. I haven't heard the word `recession' in months. Last year, that was a mantra," said Regina Kirshbaum, co-owner of the stores with her husband, Michael. "I believe that folks who offer a tremendous value and a unique product will have distinct advantage, and I believe people want to shop locally."
But that does not stop Agabhumi Bali from taking advantage of social media to market itself and its merchandise.
"When you're a mom-and-pop (shop), you've got nobody else to blame if you're stagnant," said Kirshbaum, who also has stores in Santa Monica, Calif., and Barbados.
Darien resident Kevin Coupe, publisher of MorningNewsBeat.com, a website that follows the retail industry, is taking a more tepid approach to the shopping season.
"You still have a national unemployment rate of around 9.5 percent," he said, estimating that if labor economists added in those who are under-employed or have given up looking for work the number would be 20 percent. "People have been behaving as if we're still in a recession. A lot depends on geography and demography. I tend to be suspicious. You'll probably see a small increase in Christmas sales, but I'd be shocked if it were a huge jump."
To achieve that improved level of sales, retailers will be offering deep discounts, Johnson said, because they realize that there is intense competition for consumers, most of whom have tight spending limits.
However, Marilyn Walberg, manager of The Good Sport, a sporting goods store in New Milford that has survived numerous downturns in its 40 years, said customers seem to be somewhat optimistic about the recovery and are willing to spend.
"This year, people are shopping earlier. A lot are looking, coming back and buying. It's the economy," she said, adding that Haflinger's German wool clogs, Woolrich fleece blankets and assorted outerwear are among the popular purchases. "After Thanksgiving, it will be busy."
In Greenwich, the upscale shops on Greenwich Avenue have not been immune to the downturn, said Terry Betteridge, chief executive officer of Betteridge Jewelers, who is optimistic about the holidays.
"Altogether, things seem much better. I think business is better for most in the area," said Betteridge, whose father, Bert, moved the business to Greenwich Avenue in 1950. "Pensions' investments have returned faster than anyone thought. I believe the solid values of precious things seem stronger relative to paper money, and that great craftsmanship is seen as a finite and diminishing resource to be treasured also. All the hubbub about inflation and manipulation of currencies makes money seem a pale reflection of the real values, and all that helps my business."