On the surface, little seems to have changed as the opening bell rang for the retailers’ battle that is the holiday shopping season. On Thanksgiving day we carved some 46 million turkeys and downed 50 million pumpkin pies despite a shortage of pecans created by Chinese consumers who imported the best quality nuts and bid the price too high for many bakers and American families to match. We watched some 12-15 hours of football, with 250-pound behemoths considered too light for many positions. Some 3.5 million people jammed the streets of Manhattan to watch the Macy’s parade, and 47 million, the largest number since 2007, took to the air and the roads, drivers benefiting from gasoline prices averaging about $2 per gallon. Some 135 million people will have shopped in stores and online by closing time Sunday, the majority having trooped to the malls.
Just like old times in the case of a willingness to gorge, travel, shop, attend football matches and congregate despite freezing temperatures in part of the country and Islamist terrorists’ attacks on Paris – Obama took to television to assure Americans that he and his security team are “on the case”, that team including Homeland Security, responsible for TSA employees who failed to detect weapons brought on flights by investigators 95 percent of the time.
But not like the past when it comes to consumers’ ability to spend and how we shop and what we buy. For one thing, consumers have more ability to spend than they have had in recent years. The jobs market has improved, inflation is nil, incomes are up, and Americans last month saved a larger portion of those incomes (5.6 percent) than they have in the past three years. So consumers, who account for about 70 percent of the nation’s GDP, can and will probably spend this holiday season. But the pattern of spending is less likely to mimic that of past years.
No longer do shoppers prowl department stores in search of the latest fashions, even if deeply discounted. Instead, this year they seem to be spending their money on four things:
· In defiance of the trend away from “stuff”, anything with “Star Wars” on it is being snatched up, to the likely tune of $4 billion, driving toy sales to a 10-year high, and Apple watches and iPods seem to be doing surprisingly well.
· Cars are flying off the showroom floors (pun intended) in response to attractive discounts and a three-day weekend that gave buyers time from work to test-drive and savor that “new car smell”, perhaps after checking prices on the web.
· House furnishings, practical and beautifying continue to drive sales in DIY and related chains.
· “Experiences” -- dining out, spa treatments, hobbies – were not “hot” items, but have steadily claimed am ever-larger portion of consumers’ cash otherwise available for Black Friday.
Some bricks merchants are taking the advice offered by Anna in “The King and I”, and whistling a happy tune so no one will suspect they’re afraid. Gerald Storch, CEO of Hudson’s Bay Company, which owns high-end Saks Fifth Avenue and Lord & Taylor, sees no enduring trends that threaten his bricks. “Cars instead of clothes, the Internet reaching a tipping point – I’ve heard every theory imaginable. But Christmas always comes, and people have to shop. They will be back,” he says in an apparent effort to “fool himself as well” as his interviewer. Macy CEO Terry Lundgren is not fooled. He is selling stores that have been made redundant by the chain’s rising Internet sales.