Economists say the U.S. economy is consumption-driven, and that until Americans have the confidence and the means to buy more goods and services, the recession will continue to hang on.
That is why “Black Friday” and the entire holiday shopping season could be good news or bad news as the nation looks for signs of economic recovery. With that in mind, a KCTribune reporter asked mall managers and the Chamber of Commerce of Greater Kansas City for their impressions of the economic outlook for this year’s "Black Friday" and the rest of the Christmas shopping season.
While shoppers may greet the biggest shopping day of the year by spending a little more freely than last Christmas season, that's not saying much, according to experts. In 2008, holiday shoppers spent 3.4 percent less than the previous year. The difference marks recessionary spending in 2008 vs. spending during a booming economy, namely 2007.
This year, financial forecasters are predicting the rate of increase in spending will rise from less than one percent to a hopeful high of just over 1 percentage point. Despite an overall sluggish economy and unemployment statistics in the double digits, retailers continue to hang their optimistic hats on these modest upswings in spending.
"A lot of retailers are obviously holding their breath, waiting to see what will happen come Friday," David Albrecht, manager of business research for the Greater Kansas City Chamber of Commerce, said this week.
However, if retailers are ambivalent, and many are, there's good reason, Albrecht said. "We haven't had anything like this (overall economic condition) for quite a while, and nobody knows exactly what to expect," he said.
The day after Thanksgiving traditionallyis a time when retailers entice spending by offering "door-busters," or promotions so extraordinary that shoppers wait in line for hours before stores open, then crash through the doors at opening time.
Retailers also offer coupons, give-aways at mall entrances, such as chocolates and coffee, and other special offers, such as buy one-get one free and spend a certain amount, and receive another item at a much-reduced price. Free mall entertainment, including live music, such as carolers, and the creation of balloon characters for children, also boost traffic.
Retailers are taking cues from last holiday shopping season in which they employed many such enticements to convince shoppers to part with a precious commodity--their dollars. Based on last year's sales, driven by these special offers, at least some Kansas City area retailers are optimistic.
For instance, management at the Zona Rosa shopping center, located in Kansas City, North, is optimistic that last year's strategy will provide a repeat performance this year. For the first time, the mall's developer funded $25 gift certificates good at any mall retailer. Last Black Friday, management distributed the certificates to the first 1,000 people, ages 18 and older, upon entering the mall during a midnight opening. They’ll repeat the promotion this year.
In addition, the mall offered, and again will repeat this year, drawings for free gifts from TV sets to free meals at restaurants every five minutes from midnight to 3 a.m., said Rosemary Salerno, general manager of the mall, which has more than 90 retailers. The result last year? The best sales figures in the mall's history, despite the poor economy, Salerno said.
Last year, publicity of the offers had shoppers lining up at the door beginning at 4 p.m. on Thanksgiving Day. "The good thing that did for us last year was catapult us into the best holiday spending ever," she said. "We're really hoping for a repeat this year. We bucked the trend...our traffic just skyrocketed as a result."
Salerno said part of the optimism is based on inquiries whether the mall will again offer the gift certificates."We kind of judge things by phone calls, and our phone has been ringing off the hook," Salerno said.
Sean Phillips, regional marketing director for Oak Park Mall in Overland Park, said his mall also is offering freebies and special offers this holiday season.
"In general, discounts continue to be a big part of how retailers are attracting customers," he said. He said retailers are hoping that this quarter's sales figures, from October through December, will follow a trend from last quarter (July-Sept.), in which spending was up slightly.
Ryan Oester, director of marketing and business development at the Independence Center, said there is a new service that will offer free transportation via shuttle bus to area attractions, including the new Events Center and his shopping center The service begins on Black Friday, and will be offered on Saturdays until Christmas.
"We're hopeful it will add some convenience," Oester said. He said discounts and special offers this year will be reserved for more traditional, less pricey items, such as sweaters, fragrances, music and books.
But retailers have more tricks up their sleeves than special offers, the Chamber’s Albrecht said. They also use merchandising tools, designed to reduce costs, such as ordering less merchandise than in boom years.
Oester summed it up this way. "Obviously, Black Friday is going to be a pretty big day."