RETAIL TRENDS – Tinsel time! Retailers look forward to holiday season as national industry group predicts 4% increase in sales

Posted on Nov 1, 2012 :: Retail Trends
Sharon Verbeten
Posted by , Insight on Business Staff Writer

Jennah Landwehr, left, of De Pere and Kayla Socha of Green Bay take a break from shopping at Bay Park Square Mall in Ashwaubenon in October. Retail experts predict a modest increase in sales this holiday season.

Despite an uncertain economy and a still unpredictable presidential election, retailers are hedging their bets that this holiday season will usher in lots of green, both for national chains and local independents.

Most national pundits concur in their predictions that the retail outlook for holiday sales will not be negative, nor robust – with many groups predicting modest increases in the 3 percent to 5 percent range.

The National Retail Federation, for example, predicts holiday sales will increase 4.1 percent this year to $586.1 billion. Average holiday sales increases, according to the NRF, generally hover around 3.5 percent. Several national retailers such as Wal-Mart, Toys R Us and Macy’s (all have outlets in Northeast Wisconsin) plan on adding thousands of seasonal workers.

But how do national predictions translate to Northeast Wisconsin stores?

The Fox Cities area, for example, enjoys a thriving retail environment. In fact, “The entire Appleton retail market is so large, we are the anchor of the largest shopping district in the state,” says Jim Zielinski, marketing manager of the Fox River Mall in Grand Chute. Including the entire shopping district around the mall, the region has the highest concentration of retail in the state, he says – a region which regularly draws shoppers from as far south as Fond du Lac and as far north as Michigan’s Upper Peninsula.

“Fox River Mall is very different than most malls,” notes Pam Seidl, director of marketing and public relations for the Fox Cities Convention & Visitors Bureau. “Upwards of 30 percent of their traffic comes from more than 50 miles away.”

And retail is no small deal to the Fox Cities’ overall economy. In 2011, Seidl says total visitor spending in the region was $382 million. “Of that, $88 million was spent on retail. Shopping is a key draw here,” she adds.

Zielinski notes, “Retail, as a whole, has been fairly strong this year. The mall itself has experienced low single-digit increases, and we expect that to continue through the holidays.”

The mall, which opened in 1984, draws 16 million shoppers each year, Zielinski says. And while 20 percent of the mall’s traffic comes in November and December, the mall does 25 percent of its business during those two months.

In addition to remodeling projects at two of the mall’s six anchor stores (JCPenney and Target), Zielinski points to new retailers and restaurants in and around the mall as adding interest and traffic, including H.H. Gregg (electronics), Ann Taylor Loft (women’s apparel) and Italian restaurant Buca di Beppo.

Among the specific items he predicts will do well are electronics. “Big-ticket items have dropped in price considerably,” Zielinski says. “The big-ticket items are starting to become reasonably priced; tablets are taking over computers, and you’ll see a big jump in tablet sales.

“The high-end category has performed really well across the country, including here. Those people in the upper demographic who have large amounts of disposable income will continue to buy.”

He also expects electronic toys and children’s and teen apparel to continue their strong showing, but believes inexpensive home décor and specialty items will see slower sales. “Specialty sales really follow consumer trends,” he says. “This is a very price-conscious market.”

Those looking for deals are also likely to seek out outlet shops, such as those at The Outlet Shoppes of Oshkosh.

“The outlet center industry is definitely the hot subject in the retail industry,” says Gina Slechta, vice president of marketing for the mall’s owners, Horizon Group Properties.

“We may say that the recession is over, but people are still very tight with their dollars. But they still want designer names and designer styles,” she says.

“The holiday season is good for everybody… across the board. You’ll see that about 20 percent of our business is holiday business.”

Slechta notes that recent capital improvements to the mall, along with efforts to re-tenant with higher-end brands such as Coach, should pay off this holiday season.

Outside the box, so to speak, smaller retailers are hoping for a profitable season as well. Lisa Betley, owner of Bellybeans, a maternity and children’s apparel shop in downtown Appleton, says, “I’ve noticed year after year, our holiday season has gotten stronger. I attribute a lot of that to Appleton Downtown Inc.” and its focus on shopping local.

In Green Bay, shoppers can choose from the mall scene (such as Bay Park Square in Ashwaubenon) or opt for independents, like the niche shops on Broadway in downtown Green Bay.

Chris Naumann, executive director of On Broadway Inc. in Green Bay, notes that small retailers are still feeling some trepidation as the holiday shopping season begins. “The past couple of years, retail sales have trended downward for many small businesses, mostly due to the economy. However, I would say that our businesses have been steady, and many are optimistic and expect a busy fourth quarter.

“The ‘shop local’ craze has certainly helped, and the movement has absolutely kept many of our businesses moving forward.”

Both Zielinski and Slechta point to Black Friday as an annual success story for malls, which often plan (very) early openings and special events. In the world of independents, however, Black Friday is often just another day.

“Black Friday, to many of our businesses, is a TGIF moment,” says Naumann. “Although many of our small stores and restaurants are busy … on Broadway, you can catch your breath, you can stop for a break, you can have a conversation, and most importantly you can feel human.

“We are proud to say we represent a sanity break for many of those caught up in the hysteria.”