Will holiday sales be marvelous or middling?

December 11, 2006

Rising gasoline prices have drained consumers' wallets this year. The housing market is losing steam. The war in Iraq is dragging on. Still, chains and independents are optimistic that consumers will fill Santa's sleigh with gifts plucked from their shelves. The National Retail Federation's (NRF) annual Holiday Consumer Intentions and Actions Survey offers plenty of reasons for retailers to celebrate.

According to the survey, conducted by NRF and BIGresearch, the average consumer plans to spend $791.10 this holiday season, up from $738.11 last year. NRF forecasts that holiday sales will increase 5%, to $457.4 billion.

Grabbing on-line shoppers

In early November, CVS mailed its "most valued customers" an invitation to a private holiday beauty sale with a coupon for "$5 off $20 on all beauty products" that could be used until Nov. 18. The copy stated, "Our most valued customers deserve special treatment for the holidays."

Lewis Drugs, Sioux Falls, S.D., spiffed up its Web site, telling consumers, "Ring in this Holiday Season with a stop to your local Lewis Store!" The chain expanded its exclusive collectible offering with two new local landmarks: First Lutheran Church and Minnehaha Courthouse & Clock Tower. The site also touted an enormous selection of artificial trees; retro tinsel trees; and holiday inflatables, including Santa waving from the chimney, a nativity scene, and a snowman waving.

Mark Griffin, Lewis' president/CEO, told Drug Topics he anticipates this holiday season to be highly promotional. "Wal-Mart has a habit of driving seasons," he explained. "Given its circumstances right now, it will be very aggressive. If it is aggressive, that may drive the holiday," he said.

To entice shoppers, Griffin said, his chain will offer "Lewis hot buys and some 6:00 A.M. door-busters." For example, he expects the 10th anniversary edition of Elmo, which is in extremely limited supply, "will be the star of the toy world this Christmas."

Other hot items include cars and products associated with the Disney animated movie Cars; Monopoly's Here and Now, a new board game; "Deal or No Deal," another new board game; LeapFrog learning systems Leapster and Little Leaps; Sony Playstation 3; and Nintendo Wii Game System.

Lewis also predicts flat-screen TVs will be the rage. "There's been a 40% to 50% drop in prices in the past year," he said. "We have them for $249 and up." He also said the following products would be hot sellers: MP3 personal video players; digital cameras; iPod accessories, such as clock radios and speaker systems; the Hamilton Beach Toastation, which is a toaster and oven in one; juicers; and food processors.

When it comes to decorating, Lewis believes people will buy more than one tree for their home. He expects smaller trees that fit in the foyer to fly out retailers' doors along with LED lights and inflatables that are "bigger and more complex, with more things going on inside."

Finally Lewis said the 3M air purifier will be scooped up along with DeWalt Power Tool Kits and Black & Decker's Workmate bench.