Economic woes temper retailers’ Black Friday expectations

Heather Cory

Shalayne, left, and Scott Manning do their Christmas shopping a little early at Galleria Mall on Monday to try and beat the after-Thanksgiving rush.

By Becky Bosshart (contact)

Tuesday, Nov. 25, 2008 | midnight

Cautious shoppers crunched by credit and spooked by the economic crisis are expected to spend more carefully this holiday season, retail organizations reported. Stores are still enticing consumers with big sales early Friday for the official start of the holiday shopping season. But with all this fear floating around, Black Friday may ring in a season of mourning rather than the ring of cash registers.

"I haven't spent a dollar," said Mariel Orozco of Summerlin as she strolled through downtown Henderson last week, at the Third Thursday art event. Job security uncertainty has led Orozco to cut back her spending. She spent $700 last year on gifts. This year her nephew will be the only one getting a present, she said.

Consumers overall will be more frugal this year, according to the National Retail Federation. Shoppers are expected to spend $832 apiece this holiday season, an increase of about 2 percent from last year, which is the lowest increase since the federation started its survey in 2002.

"Current financial pressures and a lack of confidence in the economy will force shoppers to be very conservative with their holiday spending," said Rosalind Wells, National Retail Federation chief economist.

Overall, retail sales are expected to top $470 billion this holiday season, which is a 2 percent increase over last year. This gain falls well below the 4 percent average holiday sales growth, according to its 2008 consumer survey.

The International Council of Shopping Centers' survey found that about 37 percent of consumers reported they were likely to scale back on their gifts and other holiday-related expenditures. The majority of these consumers cited the high cost of living as the key reason.

Rachel Lucero of Henderson, who recently got her first unemployment check after getting laid off from Progressive Gaming in September, said she planned to skip Black Friday shopping for the first time in four years.

"I always have the spirit of Christmas, but the spending is going to be tight," said the mother of three. She expects to spend $300 on her children and husband and use cash for gifts at a local auction. No credit for her.

"The way the country is going, I don't want to get stuck in a jam later," she said.

The National Retail Foundation survey found 32 percent of Americans will be using credit cards for holiday purchases, down slightly from last year.

Still, many valley residents are overspending and struggling to pay their mortgage or rent, said Cena Valladolid, chief operating office of the Consumer Credit Counseling Service.

"I think people are still using their credit card to supplement income," she said. "They are using it to make their housing payments. Soon they will be maxed out on their credit card and still have an unaffordable mortgage. And 2009 will be even worse."

On average, 1,400 people a month have been seeking counseling at the 2650 S. Jones Blvd. center. A year ago it was about 600, Valladolid said.

To keep spending under control, Valladolid recommends setting a spending limit before shopping for holiday gifts. Then stick to it. Make craft gifts. Look through sale ads. Have a potluck Thanksgiving dinner. Do a Secret Santa gift exchange rather than buying for everyone in the family.

"We suggest using cash only," she said. "That will avoid using credit cards and building debt."

On Friday, many national retailers' accounting ledgers enter into the black for the first time, and they do it by getting people into the door with "blitz specials," such as a $90 digital photo frame. Some local retailers remain optimistic despite the constant economic analyst banter that seems to wallow in to the malaise.

"People will still celebrate Christmas, even in a down economy," said Bonnie Fogel, owner of Unicahome, at 3901 W. Russell Road. She has sold modern furniture, gifts, home accessories and books in Las Vegas for about six years.

Herb Grabb of Henderson still wants to celebrate Christmas with gift buying. He plans to spend about $1,000 this year, a portion of that on a gym membership for his daughter. The small business owner lost most of his retirement savings in the jumpy market this year, and his business is down slightly. But his income is still steady.

"But, oh yeah, the economy does concern me," Grabb said.

Owners of The NeverEnding Story, 9440 W. Sahara Ave., expect their worst Christmas. The children's book and gift store has been in business for almost three years.

"We don't have high hopes for a good holiday season," co-owner Kim Diehm said. "I think because of what we've seen in the last couple months. It's been a slow downturn."

Co-owner Jennifer Graves said if news reports are correct, Christmas 2009 should look at bit merrier.

It's a different picture at traditional discount locations.

"Thousands before sunrise" are expected at the outlet malls, according to Michele Rothstein, spokeswoman for Las Vegas Outlet Center and Las Vegas Premium Outlets. The Las Vegas Outlet Center's big sale kicks off the midnight after Thanksgiving. The outlet, 7400 Las Vegas Blvd. South, has extended hours through the shopping season.

"The outlets, by virtue of being outlets, save you money, which is why they are so popular," Rothstein said. "But to have a sale like this and an environment where people are looking to save money, we're hopeful people will see Las Vegas Outlet Center as a great resource."

Becky Bosshart can be reached at 990-7748 or becky.bosshart@hbcpub.com.