Local Retailers Less Optimistic About Holidays : Survey: Merchants in O.C. and the region are not as upbeat about upcoming sales season compared to others across the U.S.
Retailers in Orange County and the Southland expect less from the upcoming holiday season than their counterparts elsewhere in the nation, and consumers nationwide say they’ll spend less than they did in 1994, according to an annual survey.
In Southern California, 75% of the retailers polled by Deloitte & Touche LLP, the accounting firm, expect consumer spending to meet or exceed last year’s total. Nationwide, 82% of retailers expect the holiday shopping season to be as good or better than last year’s.
Southern California retailers are noticeably less optimistic than last year, when 94% of local merchants polled predicted that consumer spending would rise during the retail industry’s annual make-or-break season.
Mirroring a nationwide trend, Orange County consumers are less bullish than retailers about the upcoming holiday season, according to Deloitte & Touche. The survey suggests that the average shopper will spend $685, compared to last year’s holiday shopping average of $714.
But there’s one positive note--Orange County’s consumers don’t seem to be worried about lingering effects from the county’s unprecedented bankruptcy filing last December.
“Last year, there was a great deal of uncertainty over the bankruptcy,” said Tony Cherbak, a Deloitte & Touche partner in Costa Mesa. “But now, I don’t think it’s on a lot of people’s minds.”
Still, Southern Californians remain skittish because wages are flat, real estate prices are down and, as part of a nationwide trend, consumers are piling up credit card debt at an “alarming rate,” Cherbak said.
“It’s obvious that people don’t have as much discretionary income, so they’ve been using installment debt to make purchases,” he said.
Anxious retailers are hoping that the massive buildup in consumer credit won’t prompt a repeat of what happened in late 1989 and early 1990, Cherbak said, “when all of a sudden, [hard-charging consumers] knew that they had to scale back.”
Retailers say they’ll use sales to entice shoppers into their stores early in the season. The sales are designed to attract shoppers who hold off on shopping in anticipation of sales late in the season.
That desire to move goods early means that savvy shoppers will see clearance sale signs popping up “slightly earlier this year than last,” Cherbak said. “Nineteen percent of retailers surveyed indicate they will take such markdowns prior to Dec. 1, compared to only 9% in 1994.”
The annual survey showed few surprises when it comes to what shoppers expect to buy. Clothes, toys and home electronics topped the list, with sporting goods and jewelry following close behind.
