Holiday Spending May Rise but Not Enough to Make Retailers Merry
West Lafayette, Ind., Retail sales are expected to be about 4% more this holiday season than last year, but for every dollar spent on fuel, one dollar less is spent on the holiday, according to Richard Feinberg, a researcher with the Purdue Retail Institute and director of the Center for Customer-Driven Quality.
“Fuel prices are just like a tax on consumer spending,” Feinberg said. “This is not good news for retailers who have had higher costs and will have greater promotional expenses as they spend more money trying to get people into the stores.”
Home heating oil is expected to go up 25% or more this season, which also will leave consumers with less disposable income to spend if temperatures drop in November, Feinberg said.
Feinberg estimates retail holiday sales in the United States will be $475 billion to $500 billion in 2007. Data indicates that holiday sales of apparel will increase only 3% over last year and electronics sales will rise 5% above last year. Consumer electronics, jewelry, video games/CDs/DVDs and clothing are expected to be the most popular categories for spending.
Big discounts and sales, while good for consumers, may not be good for retailers because a 4% sales increase may not mean a 4% increase in profitability, he said. If retailers begin to worry that they will not make their expected numbers, they will reduce prices even more, which will disproportionately affect profits.
More common this year, Feinberg said, will be coupons at point of purchase that are designed to get consumers back in the store during a specified time.
Since Christmas is on a Tuesday, Feinberg said the biggest shopping day of the year will likely be Dec. 22, the Saturday before Christmas.
Wal-Mart reveals holiday deals
BENTONVILLE, Ark. Wal-Mart is kicking off the holiday shopping season early. The company announced today that it plans to reveal its holiday deals online Thursday, with items becoming available Friday morning as the merchant officially opens special Christmas shops.
“Our customers can fulfill all their holiday needs at Wal-Mart and not only save money, but buy gifts they can be proud to give,” said John Fleming, chief merchandising officer Wal-Mart Stores U.S.
Holiday savings is the focus of the Wal-Mart Christmas marketing campaign that breaks this week. Broadcast and print ads will show that when shopping at Wal-Mart, “The more you save, the more Christmas you can give.”
Hanesbrands, Disney announce 10-year deal
WINSTON-SALEM, N.C. Hanesbrands and The Walt Disney Company today announced a 10-year strategic alliance that includes product co-branding, attraction sponsorships and other brand visibility and signage at Walt Disney Parks and Resorts properties.
Under the alliance, Hanesbrands’ Hanes and Champion brands will have sponsorship rights to popular Disney attractions. According to Hanesbrands ceo Richard Noll, Hanes will be the presenting sponsor of the Rock ‘n’ Roller Coaster Starring Aerosmith. Hanes will also have a customizable apparel venue in Downtown Disney at Walt Disney World Resort that will enable guests to design and personalize their own custom T-shirts and other items. Champion will gain the naming rights for the stadium at Disney’s Wide World of Sports Complex, the nation’s premier amateur sports venue. The alliance also includes in-store promotional and brand building opportunities at ESPN Zone restaurants and stores located in Anaheim, Atlanta, Baltimore, Chicago, Denver, Las Vegas, New York City and Washington, D.C.
“This alliance is a key component of our marketing programs to drive long-term growth and is part of our aggressive approach to building and investing behind our Hanes and Champion brands,” said Noll. “Our alliance with Walt Disney Parks & Resorts, truly one of the world’s greatest brands, is a perfect fit to maximize the brand strength and equity of both organizations. In addition to becoming key parts of the consumer experience at Walt Disney Parks and Resorts properties worldwide, Hanes and Champion will execute consumer marketing and promotional outreach in the retail apparel marketplace.”
The partnership gives Hanesbrands apparel lines category exclusivity for select apparel at Disneyland Resort in Anaheim, Calif., Walt Disney World Resort and Disney’s Wide World of Sports Complex Stadium, both in Lake Buena Vista, Fla., and all eight ESPN Zone stores across the country. Much of the apparel will be co-labeled, including Disneyland Resort by Hanes, Walt Disney World by Hanes, Disney’s Wide World of Sports Complex by Champion and ESPN Zone by Champion. Basic apparel, under the terms of the agreement, is defined as T-shirts and tanks and fleece sweatshirts, sweatpants, hoodies and other family fleece, including infant and toddler items.