'Tis the season to shop
By: EILEEN SMITH
The Burlington Coat Factory store in Marlton is a holiday diagnostic center, where the retailer takes the pulse of consumers.
"It's a great store for us to test fashions," said Stephen Milstein, vice president of the Burlington City-based chain. "We can tell in three days whether something is hot or not."
Retailers and analysts are polishing their crystal balls, intent on divining what will entice shoppers in an intensely competitive season.
The National Retail Federation, a Washington D.C.-based trade group, says the typical consumer will spend $738.11 on the so-called winter holidays of Thanksgiving, Christmas, Hanukkah and Kwanzaa, eclipsing Mother's Day and Easter.
The Shopping in America 2005 consumer survey says the average budget is $655 for gifts and an additional $316 for parties and decorations.
Britt Beemer, founder of America's Research Group in Charleston, S.C., has been within half a percentage point in his predictions for 11 of the past 12 years. He initially believed soaring gasoline prices could contribute to the first holiday sales drop in more than 20 years.
But his outlook brightened significantly with moderating fuel prices and an unseasonably warm fall. He forecasts a modest 3 percent increase in sales.
Other market watchers are more upbeat. The National Retail Federation anticipates a 5.1 percent boost in sales, based on a survey by BIGresearch. The Shopping in America poll predicts a robust 7.8 percent spike.
Both surveys overshot actual spending in 2004 and Beemer thinks their expectations are unrealistic this year, particularly since no hot toy or must-have fashion has emerged to propel consumer enthusiasm.
"Retailers are too conservative, repeating what they've done before," he said. "If there was something new and exciting, people would spend to buy it."
He also expects a bonanza for bargain hunters with retailers slashing prices deeper and earlier.
"Last year, we saw 50 percent off the week before Christmas," he said. "This year, it will be two weeks before Christmas."
Retailers are expanding their sales staffs a scant 3.5 percent to accommodate the crush, according to the retail federation. Existing staff will likely work longer hours but Beemer predicts shoppers will still find long lines and little personal attention.
"Customer service is at the worst level I've seen in the 26 years I've been researching retail," he said. "Consumers have been dumbed down by poor service and have gotten used to it."
Wal-Mart, the nation's largest retailer, is adding 50,000 seasonal associates to the rolls, said spokesman Marty Heires.
The discounter is forecasting brisk holiday sales. But Heires noted external factors could put a damper on consumers' spirits.
"We are still concerned about the impact of the cost of gasoline and heating oil on shoppers," he said. "It could make the difference between a good Christmas and a great Christmas."
Victoria Bloodsaw of Philadelphia shopped at Cherry Hill Mall last week, starting what she predicts will be a precarious budget balancing act this season.
"I have a 15-year-old daughter who wants all kinds of things," she said. "On the other hand, I figure I'll have to pay more this year for heat. Plus she'll be going to college and I have to save for that."
Bloodsaw said she will scrupulously avoid overspending and will stress the spiritual nature of the holidays at home. Like 38 percent of shoppers in the retail federation's survey, she'll make discounts a priority.
Burlington Coat will price aggressively, extend its hours, hire seasonal staff and increase the merchandise on the floor by at least 20 percent. Milstein predicted short, down jackets will be a hit with juniors, in brand names such as Baby Phat and JLo.
"Our buyers are in New York every week and we're constantly testing new styles," Milstein said. "We've always got our ears open and we shop our competitors."
Beemer predicts a lackluster season for mall-based department stores, which have struggled for the past several years. Of the discounters, he said Wal-Mart and Target will be the two biggest winners this season.
"Of the specialty retailers, Chico's, which has been on a roll for two years, will stay strong. Best Buy will hit good numbers if the iPod stays hot."
So, what items are appearing on wish lists?
According to the NRF, 55 percent of consumers said they'd like to receive books, compact discs, DVDs or video games. The majority -- 54 percent -- would like to find apparel under the tree, followed by electronics (38 percent) and jewelry (26 percent).
More than half -- 52 percent -- are hoping to receive gift cards. But Bloodsaw said she will likely stick to buying gifts she can put in a box, wrap in festive paper and tie with a bow.
"It is a joy to see someone open a present," she said.