Finally, cause for optimism: Although cautious, retailers hopeful upcoming season will beat last year

Will the 2010 holiday shopping season in the Grand Valley be as strong as 2007, as poor as 2009 or somewhere between the two?

These are the kinds of questions retailers and economic analysts are asking as the Grand Valley and nation head into what, from a sales standpoint,  perennially raises hopes as the most wonderful time of the year.

At the Mesa Mall in Grand Junction, managers aren’t discussing local projections, but are paying close attention to national prognoses.

“This holiday season we’re likely to see a steady, although still cautious, consumer,” Jammie McCloud, marketing manager for the mall, states in an e-mail to the Grand Valley Business Times. “As everyone knows, the recovery continues to be a slow one, but nationally, retail has seen a positive year so far. The National Retail Federation is estimating a 2.3 percent increase this year.”

The news would be welcome following last year’s 0.4 percent national increase and the 3.9 percent decline reported in 2008.

Tony Gagliardi, state director of the National Federation of Independent Business in Colorado and Wyoming, says retail sales have shown an “uptick” over the last couple of months. But even businesses that fare comparatively well remain reluctant to borrow money for expansion because of economic uncertainty, Gagliardi adds.

On a regional scale, supply managers surveyed in Colorado, Utah and Wyoming voice mixed predictions for the holidays. At 33 percent, most supply managers expect sales to increase 1 percent to 4 percent for this holiday season compared to last year. While 27 percent of managers expect sales to increase more than 5 percent, 20 percent believe sales will drop 1 percent to 4 percent and 10 percent expect a decline of more than 5 percent.

Retailers are expected to focus on supply chain efficiencies and inventory control this holiday season to limit their exposure to excess merchandise and unplanned markdowns, according to a report on the National Retail Federation website.

“Though the retail industry is on stronger footing than last year, companies are closely watching key economic indicators like employment and consumer confidence before getting too optimistic that the recession is behind them,” states Matthew Shay, president of the NRF.

Jack Kleinhenz, chief economist for the NRF, says, “While consumers have shown they’re once again willing to spend on what’s important to them, they will still be very conscientious about price. Retailers are expected to compensate for this fundamental shift in shopper mentality by offering significant promotions throughout the holiday season and emphasizing value throughout the marketing efforts.”

Managers at the Mesa Mall also expect shoppers to spend cautiously this year.

“Shoppers last year were very focused on getting the most bang for their buck, and again this year, we expect shoppers will be looking for value,” McCloud says. “Retailers who connect best with shoppers have these things going for them — great value: smart, engaging promotions; and, just as important, exciting new merchandise.”

U.S. Tech TV
U.S. Tech salesman Forrest Smith watches a projection screen television that can be adapted to display three-dimensional images. With the price of monitors dropping below $1,000, sales for TV systems were brisk in early November.

Price has been a big motivator for customers at U.S. Tech, says Earl Cogdill, owner of the Grand Junction electronics store.

Many people who’d been waiting for lower prices for electronics are jumping on recent deals. Cogdill says the result is his business is up for the year compared to 2009. Business in early November was up more than 50 percent compared to the same period in November of last year, he says.

Flat panel televisions have come down significantly in price, Cogdill says. And three-dimensional TV systems have sold “very well,” he adds.

Some projection TVs are capable of displaying 3-D images as long as they’re paired with a 3D Blu-ray player and viewers wear 3-D glasses. Such TVs are now selling for less than $1,000, Cogdill says.

Prices for some monitors can be even lower because of instant manufacturer rebates. The new instant  rebates offer a discount off the price at the checkout counter. So a customer might realize a $200 deduction at the store instead of being forced to mail in a rebate coupon and then wait for a check in the mail.

Even 3-D glasses have come down in price. They were going for $349 for two pairs of glasses last May, but customers can now buy two pairs of off-brand glasses for less than $200.

In downtown Grand Junction, merchants are optimistic that extended shopping hours and an earlier Christmas tree lighting will encourage more people think of downtown for holiday shopping, says Kathy Dirks, marketing director of the Downtown Partnership.

The tree lighting has been moved up to the Friday before Thanksgiving and many stores will remain open Thursday nights and Sunday afternoons.

Karen Hildebrandt, owner of Unique Expressions in downtown Grand Junction, says she’s cautiously optimistic about the coming holiday season.

“I’m hoping that now that the road construction is done (along Main Street between Second and Fourth streets), that we’ll see sales at least as good as last year.” Hildebrandt says sales at the store during the first weekend of November exceeded sales for the same weekend last year.

“I think everyone’s hoping it’ll be better (than last year),” she says.

Hildebrandt was among the first downtown merchants to install an elaborate Christmas display in her store window. “People like the fact that we take the time to do that,” she says.

One Grand Junction store that’s sure to do better than last year is the Cabela’s outlet at Mesa Mall. That’s because the store, the first in Colorado, opened in May.

Since then, sales at what’s expected to constitute a regional shopping draw have been brisk.

“We are very pleased with operations at our Grand Junction store since its opening,” says John Castillo, communications manager for Cabela’s. “Our loyal catalog and Internet customers have strongly supported us and we are especially pleased by the number of new customers who shop at the store. The store is meeting all expectations and we’re delighted to have it as our first Colorado store.”

The NRF bases its projected increase for the year on such economic indicators as employment, industrial production, disposable personal income and previous monthly retail sales reports. The retail climate has been uneven for most of 2010 as sales have not been able to maintain momentum due to concerns about the viability of the economic recovery, according to the NRF website.

In Grand Junction, at least one economic indicator provides retailers reason for optimism. Sales tax collections for the city have increased three consecutive months compared to the same months in 2009.

“For Mesa Mall, and the city as a whole, we hope this is a good sign of what to expect for the important upcoming holiday retail period,” McCloud says.

Mesa County government also reports signs of increased consumer spending as sales tax collections reported in September usurped the numbers from the previous September.

The figures represent spending that happened in August, providing hope heading into the important final four months of the year.

Such indicators give retailers optimism the holiday shopping season should be at least as good as it was last year and perhaps even better.

Given what happened last year for many retailers, that’s a good thing. Says Cogdill: “2009 was unlike anything I’ve ever seen. It was worse than the oil shale bust (of the 1980s).”