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Poor Retail Sales Could Mean Bigger Deals


Department stores will have to drop prices to get consumers through the doors this holiday season, experts say — earlier opening hours just won’t cut it.

While October sales were buoyant, helped by winter sales, retails figures for November and December are expected to be about half over last year. The National Retail Federation says total retail spending is expected to rise just 2.8% through December — significantly less than the 5.2% spike in spending last year.

These lackluster predictions mean department stores will have to compete for your dollar and – in an effort to lure consumers and appease shareholders –they will need to have some headline grabbing bargains to tempt people through their doors.

“Overall, I believe we will see better sales this holiday season,” says Odysseas Papadimitriou, CEO and co-founder of in Arlington, Va. “Retailers will use the better sales to try to counteract the negative effects of uncertainty about the economy, low consumer confidence and the persistently high unemployment rate.” But there’s a downside to any rush by retailers to be the first with their bumper discounts. “Black Friday itself will be worse than last year,” says Jeff Green, an independent retail analyst based in Phoenix, Az. “With the sales season starting in September it just dilutes the importance of Black Friday.” Green says holiday spending will be flat this year, or up 1% in a “best case scenario.”

Retailers are already trying to get a head start on Black Friday. Target, Macy’s, and Kohl’s have all said they would open for the first time at midnight on Thanksgiving, which Papadimitriou and Green say could create a domino effect of smaller stores across the country trying to beat the big stores to the punch. As Pay Dirt previously reported, for some stores the sales never end.

But some experts say never say never: Consumers might rally. “Our forecasts are not terrible,” says Kathy Grannis, an NRF spokeswoman. “A 2.8% for November and December increase is a very real look at what retailers can expect. We had a particularly strong Black Friday last year. At the end of the holiday season retailers were in awe that consumers had so much spending power.”


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About Pay Dirt

  • Pay Dirt examines the millions of consumer decisions Americans make every day: What to buy, how much to pay, whether to rave or complain. Lead written by Quentin Fottrell, the blog examines these interactions, providing readers with news, insight and tips on shopping, spending, customer service, and companies that do right – and wrong – by their customers. Send items, questions and comments to or tweet @SMPayDirt.