Three months before Christmas, Steve Carlson from Burnsville knows he will get some holiday shopping done.
Carlson stated that he and his wife will be buying smaller and cheaper gifts for their family, despite high consumer prices. “A lot more smaller gifts of lesser value. Get back to what [the holidays] used to be about,”During a recent visit to Twin Cities Premium Outlets, he said the following:
Retail analysts predict that many consumers will also start holiday shopping early to find bargains. Retailers are already adapting.
NPD Group conducted an August survey of Americans to determine how consumers will spend their holiday money this year. 56% also indicated that they plan to shop earlier.
But it’s not too soon. Star Tribune reporter talked to most shoppers in local malls last Wednesday, who said it was still too early for them to think about the holidays.
Even if people buy less, this could mean that they spend more due to the fact that consumer prices have risen so significantly. Deloitte released its annual holiday spending report last week and predicted that retailers would see revenue growth of 4% to 66% over the holidays.
This is in line with the country’s annual growth before the pandemic, and not the huge jump in holiday sales last season when sales jumped up over 15%.
“We are kind of back to normal,”In an interview with The Star Tribune, Rod Sides, global leader in retail insights for Deloitte, stated these words.
Last year, retailers enjoyed the benefits of a high level of demand as shoppers were eager to spend time with their loved ones. Higher prices for basic necessities like food and energy are reducing disposable income in many households this year. Marshal Cohen, NPD analyst, stated that they will spend less impulse shopping, which typically accounts to one-fourth holiday retail revenue.
The holiday season can have a significant impact on the earnings of many retailers over the year. It can also be used as a barometer of the overall health of the U.S economy.
Doug Killian from Lake Elmo stated that he will probably give travel-related gift vouchers to loved ones in the coming year. He plans to spend less and reduce the number of gifts that he buys than he did last.
“For us, it’s more enjoying some of the traditions of church and enjoying the holiday lights,”Killian said.
Retailers are responding in many ways to the shift in consumer spending. Many retailers have suggested that they will increase sales and promotions over last year to encourage shoppers to purchase. Amazon is rumored to be launching a second Prime DayOctober Walmart announced that it will offer the top toys of the season as it revealed its toy list. more temporary price “rollbacks”To help customers save, we are offering toys at a discount this year
Target, a Minneapolis-based company, released its top toys list last week. Items starting at $15 are a few bucks cheaper than last year. Target will start selling an exclusive FAO Schwarz line of toys next month. It will include toys as low as $10 and 50 toys as low as $20.
Sides of Deloitte said that he believes the season will be “highly promotional”As retailers attempt to reduce the stock they have ordered in the last year,
Some stores have modified the way that they order products. Target claims it has cancelled more than $1.5 Billion of fall product orders as it works on reducing its inventory of unwanted products.
Brad Ruoho, Legacy Toys owner, ordered the majority of toys this month. He hopes they will be a hit during the holidays. Although it can take a while to get certain items, shipping delays aren’t as big a concern than when Ruoho tried to stock them early last year. Ruoho now plans to open a Rosedale Center new store later in the month and said he is more selective in what he orders.
“I’m trying to predict what customers are buying and act accordingly,” Ruoho said. “We are trying to be careful and make sure we have enough stuff. … We’re going deeper into certain SKUs [stock keeping units] and not as wide in others.”
Ruoho, for example, is reducing Legacy Toys’ model car selection to around 120 items and focusing on the most popular models.
Ruoho predicts that holiday sales which account for between 30 and 40% of Legacy Toys’ annual business will be down this year. He believes that parents will still turn to Legacy Toys to find the quality gift they are looking for at big box stores.
“There may not be 20 gifts under the tree, but there will be the main one,”He said.
Constantine Rolin is co-owner of Hey Joy toy, which opened at the Mall of America on December 2020. It has been a nightmare ordering Christmas products in the last few years. The store, whose founders hail from Ukraine, has had to deal with logistical problems and missed some deadlines in the past two years.
The Ukrainian-Russian War has caused some investors to lose their faith in Hey Joy and Rolin and his partners had to postpone holiday ordering until recently.
“It is extremely, extremely late,”He said.
Rolin, however, who was instrumental in opening two Hey Joy toys stores last year, said that he still feels positive about this season.
“Toys are things that make people happy,”He said.