Holiday shopping cheer
Last week, I asked my wife how much I could spend on her Christmas present. Apparently, this is not something a husband is supposed to do. My two girls were in the room. One looked at me like I was the world's leading idiot, and the other just shook her head, saying, "Daaaad, you're not supposed to ask that."
In my defense, last Christmas my wife told me that I spent too much—although the gift in question was certainly not extravagant. It's not like I asked her what she wanted; even I know better than that. I just thought I was being practical.
"Practical" and "holiday shopping" have gone hand in hand in recent years, not only for me but for most people touched by the recession. Early reports from our retail and shipping contacts point to a holiday season that can still be classified as practical, but maybe less frugal than 2008 and 2009.
Heading into the holiday season, contacts were generally optimistic. Early indications are that the sales were running ahead of last year's pace. (Granted, last year's holiday sales results were not very good, but an improvement of any sort is welcome.)
Here are some early tidbits from our network of business contacts:
In Miami, several contacts noted that international visitors have helped boost holiday sales. In New Orleans and southern Louisiana, several retailers said that this has been their best start to the holiday season since 2006. Georgia and Tennessee mall operators reported significant improvement in traffic, especially on Thanksgiving weekend. Alabama contacts noted an increase in shipping activity for the first time in three years.
Overall, a majority of our contacts felt that sales were at or above their plans. It is important to note that because of disappointing results from 2008 and 2009, expectations were cautious to begin with. In addition, while merchants noted that discounting was drawing in traffic, they felt that overall demand was driving their results to date. In other words, customers were searching for deals, but merchants' results so far this holiday season indicate that more than just sales of deeply discounted items were behind the increase.
These reports seem to be backed up by broader surveys. According to a National Retail Federation survey conducted over the Thanksgiving weekend, more shoppers visited stores and spent more than a year ago. The International Council of Shopping Centers' weekly report on same-store sales showed a year-over-year increase of 3.5 percent for the last week of November. The survey covers comparable store sales at major chains around the country.
I haven't made it out to shop yet, and I never got an answer about how much I should spend on my wife's gift. I do know that I'll be spending more than last year, thanks to my big mouth.
By Michael Chriszt
Assistant vice president in the Atlanta Fed research department
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