Holiday sales expected to be up 5%, experts say
Retailers depend on season for large chunk of annual revenue
Published: October 02. 2006 4:00AM PST
As Elyse Douglas arranged displays of brilliant jewelry last week, she explained that many jewelry designers see their products fly off the shelves during the upcoming holiday season, representing a healthy chunk of annual sales.
"The holidays are the only time I get men in here," joked the co-owner of Douglas Fine Jewelry Design in downtown Bend.
For Douglas and her husband and partner, Steve, last year's Christmas season represented roughly 15 percent to 20 percent of their 2005 sales, which follows the national trend of retailers' dependence on holiday sales to boost their business. And the countdown to the annual holiday-shopping extravaganza is officially on, according to retail experts.
While consumers so far have shown resilience to high energy costs and a cooling housing market, retailers can expect less sales growth this holiday season, according to holiday sales forecasts released last month by the National Retail Federation.
Retailers expect holiday sales to increase 5 percent over last year, according to the federation. Holiday sales last year rose 6.1 percent to $435.6 billion, the largest increase since 1999.
If those predictions are correct, U.S. retailers will collectively report more than $450 billion in sales in November and December. The gains are not strong, but they still represent higher-than-average holiday sales growth, according to the federation.
The U.S. Commerce Department recently hinted that consumers may be spending less this winter. Consumer spending fell 0.1 percent in August, adjusted for inflation - the first decline since last fall, the department reported.
Additionally, incomes rose by only 0.3 percent in August, the weakest gain in six months. Core inflation rose 2.5 percent over last year, its biggest year-over-year increase in more than 10 years.
The holiday season includes Thanksgiving, Christmas, Hanukkah and Kwanzaa, according to the federation, though Christmas always is the biggest moneymaker: 94 percent of consumers celebrated Christmas last year, compared with 5 percent who celebrated Hanukkah and 1 percent who celebrated Kwanzaa.
Many retailers make between 25 percent and 40 percent of their yearly sales during the holidays, according to the federation, and jewelry stores often have the most at stake.
Last year, U.S. jewelry stores made 32.5 percent of their annual sales during the holidays.
Other Central Oregon businesses are already slammed in preparation for the holidays.
Focus Pocus, a family portrait studio on Bend's west side, has been booking photo shoots for Christmas cards since early September, said co-owner KC Flynn. Focus Pocus has been open on Northwest College Way since June.
"We're already seeing it," Flynn said of the holiday hop in customers. "This is our first year, so we haven't been through Christmas yet. But our business is already doubling every week."
Anna Sowa can be reached at 383-0304 or at asowa@bend bulletin.com.
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