With more than a month to go until Christmas, Viqui Denman of Agoura Hills is already scouring the region for gifts. She's planning on giving presents for the home, such as quilts and afghans. For her 9-year-old son and 11-year-old stepson she's looking at electronic games.
"I'm on a binge right now," she proclaimed as she browsed through a gift shop at Northridge Fashion Center.
Denman, balancing three part-time jobs and feeling uncertain about her future because of a pending divorce, is shopping for holiday bargains. Nothing unusual about that--consumers are getting to be tough customers at this time of year.
What is unusual is that long before Thanksgiving, retailers in Southern California have been scrambling to accommodate the bargain-hunters.
Consider the sign posted next to a small toy pig oinking away recently in the entrance of the Imaginarium store at the Century City Shopping Center.
It touted savings of 20% on Lego toys purchased by Nov. 5. It promoted savings of 25% on Playmobil products purchased before Nov. 12. And it offered a free K'nex windmill kit to those willing to spend $25 or more by Sunday.
Aggressive discounting weeks before Thanksgiving is a sign of the times.
Though Christmas retail sales in the region last year rose about 8%--a surprising and welcome rebound after several years of recession--a large percentage of those sales were made after Dec. 25, when retailers cut into their own profits by marking down merchandise for clearance sales.
This year, with sales nationwide expected to be lackluster, most local malls are anticipating sales increases of just 2% to 5% over last Christmas--not enough to break out the eggnog.
So retailers are scrambling to grab customers early and avoid getting stuck with heavy inventories after Christmas Day. Area merchants are lowering their expectations as well as their prices, launching buying incentives and advertising campaigns far earlier than usual.
They will be using promotions designed to preserve as much profit as possible.
"Over the years, retailers have trained consumers to wait for sales events," said Ira Kalish, senior economist at the Los Angeles offices of Management Horizons, the retail consulting division of Price Waterhouse. "Retailers are trying to change that behavior. This will be the most promotional holiday season since the 1992 recession year."
That sounds good to Sissy Leon of Glendale, who shopped this week in Century City. She said she normally shops late in the holiday season, despite her best intentions to avoid last-minute mall visits.
"This year, I would like an excuse to shop earlier," she said.
Retailers' expectations of modestly higher sales hinge largely on a somewhat improved local economy. Retailers are also betting that consumers' lingering nervousness about the economy will help push sales of big-ticket goods such as computers and furniture--items that are perceived to have long-term value and are related to home comfort.
Nonetheless, Southern California retailers have good reason to be anxious this Christmas.
Despite the ho-hum forecasts of economists and others, the holiday mood of consumers--particularly in the West--is positively Grinch-like, according to a survey by Deloitte & Touche, the accounting and consulting firm. In most of the country, shoppers expect to spend 5% less this Christmas season than last. And those in the western states plan to spend the least--$626.
Retailers can only hope the consumer doesn't know his or her own mind, which is often the case.
"It's not necessarily that consumers aren't telling the truth at the time of a survey," Kalish said. "It's just that they sometimes don't act on their own predictions."
One reason last year's sales exceeded expectations was a mini-spree in the wake of the January, 1994, Northridge earthquake, funded by insurance payments. This is the first holiday shopping season since the quake that the retailing landscape in the San Fernando Valley has returned to some semblance of the normal--and that means the competition has ratcheted to an intense level.
The pressure will be great for the rebuilt Northridge Fashion Center, which reopened in August after being nearly devastated in the earthquake, and for Sherman Oaks Fashion Square, which was also badly damaged by the quake and is now back in full operation.
Shirley Cowen, owner of the Country Works shop in Northridge Fashion Center, which sells folk art and gift items, said this Christmas is "critical to see if we can still maintain our business." Cowen lost $60,000 worth of merchandise in the earthquake, and had to move out of her badly damaged Chatsworth house.
"Early indications are it's very slow. Not all the stores are open, and people are used to shopping elsewhere," Cowen said.
Predicting a merry Christmas is a difficult for retailers because they're trying to navigate an economy that is much improved but still full of potholes.