A myriad of economic, social and political factors are shaping this holiday into one fraught with question. Still, while an economic downturn seems to be a common prediction, consumers are not going to be scrimping on holiday buying, according to a National Retail Federation survey. According to the NRF and Deloitte and Touche’s Consumer and Retailer Mood Survey, 82% of consumers plan to spend at least the same this Christmas as they did in 1999. “The survey confirms that retailers can expect another successful holiday season,” said NRF President and CEO Tracy Mullin. “In spite of pre-election jitters and a see-saw stock market, the only bears to be seen this year will come gift-wrapped.”
Diamond and jewelry retailers, however, are reporting mixed results, with large chains like Tiffany and Zale showing strong sales increases and others, like Little Switzerland, reporting large losses. Despite the strength of these jewelry giants, the mood across the country seems to be cautious at best among retailers of diamonds and jewelry.
Federated Department Stores, for example reported a huge loss for the third quarter and attributed it to sluggish sales.
The wariness to expect a year like last is fueled in strong part by consumer confidence.
In October, consumer confidence levels slumped to one year lows–down to 135.2 from the 142.5 registered in September, according to the Consumer Confidence Board, a monthly survey of consumers within the United States.
Conference Board Director Lynn Franco attributed the decline to a cooling economy, apprehension about oil prices, and volatility in financial markets.
The Federal Reserve, meanwhile, reported a slowing of activity in sectors like retail sales and housing in October, despite a moderate growth of the economy. Targeted as slowing areas by the Fed were: Atlanta, Cleveland, Dallas, Philadelphia and Richmond, Va. Analysts, meanwhile, are now wondering where the yo-yo aftermath of the presidential election will leave the country’s consumers. During the past year, consumers have begun questioning issues from the validity of media to whether jewelers are disclosing treatment of their gems. Any marketing strategies by retailers may be scrutinized and purchases questioned a little more this year than in the past.
Skepticism combined with a sinking stock market and vanishing Wall Street bonuses has retailers looking beyond this season to a questionable 2001.