BUFFALO, N.Y. -- Unfortunately for retailers, the Grinch will be
pushing the shopping cart again this holiday season, says Arun
Jain, Samuel P. Capen Professor of Marketing Research in the
University at Buffalo School of Management.
"This year is likely to be a repeat of 2008 with the same
winners and losers. A gloomy employment picture, restricted
availability of credit and continued uncertainty regarding the
stock market are likely to spoil the mood for Christmas shopping,"
According to Jain, households plan to spend the same amount or
less than last year on holiday shopping. The focus will be on
essential household items, like cookware and basic clothing.
High-priced items like jewelry tend to lose their luster in these
difficult economic times, he says.
"Those with extra cash have already spent it on flat-panel TVs
and cheap laptops by HP, Dell and Acer," says Jain. "Worse still,
no radical electronics goods like iPhone, Nintendo's Wii or
Blue-Ray are being offered this year. The incremental technology
offering Internet connectivity is not going to help. The only
electronic gadgets worthy vying for are the electronic book readers
being offered by Amazon, Sony and others, but these have been
around for a while and are not exactly setting fire to consumer
Jain contends that the fashion industry has not been of much
help, either. "Fall fashion trends are uneven and there is no 'must
have' style to encourage shoppers to break their piggy banks," he
says. "The same story holds for toys -- most are ho-hum and there
is nothing that will set toy aisles on fire."
Retailers are already responding to the gloomy outlook,
according to Jain. "Wal-Mart, to preserve its dominant position in
such a depressing economy, is focusing on low-priced items such as
toys for under $10. Sales, price cuts and promotions will be used
by discount stores like Wal-Mart, Target, Toys R Us, Sears and TJ
Max to steal market shares," he says. "Other big beneficiaries will
be online stores like Amazon that offer branded merchandise at
attractive prices, often saving buyers sales tax and the need to
travel to stores."
Jain predicts that competition among stores will be fierce as
they battle to grab whatever market share they can get in this
depressed market. "As early as Halloween, we've see 'value-priced'
merchandise on display, and consumers have been bombarded with
promotions, coupons, lay away and interest-free credits to nab
sales," he says.
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