There is no doubt that the 2008 holiday shopping season will be more challenging versus last year's. Here are some of the factors and trends that I foresee this year:
- Overall consumer purchases will be down versus 2007. I expect consumers to shorten the circle of recipients for which they will purchase holiday gifts. So while the immediate family – children, parents, grandparents and grandchildren – will still be receiving gifts, the second order gift giving will be trimmed back. The family dog should expect to be less spoiled than in the past.
- There are really no must have items that consumers are clamoring to buy this year. The surge in flat panel televisions occurred one and two years ago. There will be some consumers seeking to buy flat panels on sale but the demand has dropped off. No new game consoles were introduced this year and there are no big new game titles that are attracting gamers’ attention. We are in between upgrade cycles. Finally, on the toy front, there are no new Tickle-me-Elmo type toys that caused fights amongst grey haired ladies in years gone by.
- Black Friday traffic will be strong as stores opened as early as Thanksgiving evening. A beneficiary of the early heavy traffic will be mall based restaurants and food courts which should be packed as shoppers still have to eat. This will continue the trend of quick service and lower priced restaurants stealing business from the higher priced eateries.
- In 2007 Thanksgiving was several days earlier than in 2008. Thus we have less shopping days between Thanksgiving and Christmas this year. Deep discounting could start even earlier this year due to the shortened selling season.
- Falling gasoline prices at the pump are going to buffer the extent to which retail sales will get hit by the economic slowdown.
- Gift cards will become an even bigger aspect of holiday sales than in the past.
- Holiday parties thrown by companies are being down sized or eliminated. Again this will negatively impact the casual dining restaurants and chains which provide catering services.