Shoppers Slightly More Cautious About Holiday Deals this Season

‘Tis the season for many consumers to wake up early, leave all their cares behind and hit the retail store to get deals they have been craving all year. It’s that special time when parents make sure they have their kids’ request memorized and target those products as soon as they enter the store. Last year’s Black Friday saw many retail stores have what seemed to be an abundance of inventory and hence prices were pretty much slashed by half. This year these stores have adjusted stock levels and are very cautious, considering what have been going on in the jobs market this year. In addition to this, many consumers have seen reduced amounts of credit available so it will be interesting to see what retailers come up with to get the public to spend.

Shoppers and Retailers Are Cautious

The National Retail Federation (NRF) conducted a survey on whether shoppers will turn out after the Thanksgiving holiday, meaning Black Friday and the weekend. The survey found that about 57 million consumers are expected to shop. Another 77 million said they will be cautious and stated that they will have to check out the deals before they venture out. Discount retailers and department stores are set to receive the most benefit as 66.3 percent of those polled stating they will shop at the former and 62.4 percent for the latter. Electronics stores as well as clothing retailers will probably see less traffic with only 40 percent saying they will shop at those stores.

Only 27 percent said they will shop online but that number may be bigger on next Monday (called Cyber Monday because of the many online deals). With the National Retail Federation predicting that sales will only decline 1 percent this year to $437.6 billion (compared with a great decline last year), we may see a stable sales pattern.

Pinching Pennies?

Even though consumers come out to shop, that doesn’t mean they are going to spend freely. They may well be very reluctant to purchase those extra gifts for other friends and family (like they might have done last year). According to an Associated Press-GfK poll, 93 percent say they’ll spend less or about the same as last year. About half of these people attribute this lower spending to credit related problems. That may be why about 80 percent of the people polled said that this year, they would pay with cash.

Wal-Mart vs. Amazon

It seems that just in time for this holiday shopping season, these two retail powerhouses have taken the gloves off in an all out price war. It began with lower prices on the latest books and DVD’s but now it has gotten bigger. Wal-Mart is definitely at an advantage when it comes to negotiating with suppliers because of its size, so you can always expect lower prices there. However, sales in Amazon’s electronics and general merchandise business were up 44 percent. Note that these departments of Amazon compete directly with Wal-Mart. Although retail sales (industry wide) are down by 4 percent in the third quarter, Amazon has seen a 24 percent increase.

One example of this ‘price war’ is when Wal-Mart offered a $15 gift card with a purchase of the new video game Call of Duty: Modern Warfare 2. Amazon matched that offer soon after. They even both offered Microsoft’s Xbox 360 for $199 and Palm’s new phone the Pixi for $30.

Retailers are going to be offering all that they can for this coming Black Friday and weekend. As consumers, we can only hope there are deals that we think are worth it. When doing your shopping just remember to be safe and make sure you check around before you buy.