For the past seven or eight months, Bill and Kim Gaines have been working on getting their Doc Popcorn franchise open.
It was no coincidence the couple opened the all-natural snack shop last week on the upper level of Westfield Montgomery mall in Bethesda in time for the holiday shopping season. They hope hungry hordes of bargain hunters turn to them for some quick sustenance.
“We weren’t sure if the space was going to be ready in time. This is the busiest time of the year for retailers, and we really want to take advantage of the increased traffic during the holiday season,” said Bill Gaines, adding that customer traffic at the five-employee enterprise has been steady during the first few days.
In this holiday shopping season, which runs Nov. 1 through Dec. 31, Maryland retailers are expected to see a sales bump of 2 percent to 2.5 percent over last year, according to the Maryland Retailers Association. That would be about the same as last year’s increase but considerably more than in 2009, when sales rose less than 1 percent from 2008.
Nationally, retail sales are expected to increase almost 3 percent to $465.6 billion, according to the National Retail Federation. That would not be as robust as last year’s 5 percent jump but bigger than 2009’s dip.
The Internet is expected to be more of a draw this year, said Patrick Donoho, president of the Maryland Retailers Association. Cyber Monday, the day after the Thanksgiving weekend when online sales tend to jump, is expected to be busier than ever.
Retailers also are dealing with concerns over consumer confidence and the weather, he said.
“The consumer has fundamentally changed because of the recession,” Donoho said. “They are looking at value. They expect all retailers to be price competitive, including with online retailers.”
The price discounts have directly cut retailers’ profit margin, so they are becoming more “creative” in coming up with ways to encourage customers to spend money, said Rebecca Hamilton, an associate professor of marketing at the Robert H. Smith School of Business at the University of Maryland, College Park. That includes expanding store hours, offering more items on layaway and using personal shoppers.
Offering items on layaway benefits retailers by drawing customers into stores on a regular basis to make payments, Hamilton said in a statement. “Every time the customer enters the store, there is a chance he or she will make an additional purchase,” she said.
More midlevel department stores, which have lost customers to discount retailers, are offering personal shoppers to attract consumers who have used the service at upscale stores, Hamilton said.
“Advertising these services also makes these stores, like Macy’s and J.C. Penney, seem upscale,” she said. “Like expanded store hours, this additional service is made possible by the high number of job seekers. Plus, personal shoppers may work mainly on commission, meaning that their cost to the stores is relatively low.”
Seasonal hiring about the same as last year
Retailers nationally are hiring some 500,000 temporary employees for the holiday shopping season, according to the National Retail Federation. That would be about the same as last year.
Kohl’s Department Stores, which has more than 20 locations in Maryland, is hiring about 5 percent more seasonal workers than last year, or an average of 35 per store.
Apparel costs have increased from 10 percent to 15 percent this holiday season over last year, “but we’ve been successful in navigating through that change,” Kevin Mansell, Kohl’s chairman, CEO and president, said in a conference call. The retailer has found more places to cut costs, while boosting revenue with additional online sales and new features on its website, he said.
“We’ve invested in additional digital media marketing to help us reach more targeted audiences,” Mansell said.
Kohl’s is on track to reach $1 billion in online sales this year with its third e-commerce call center and distribution center in Maryland expected to play a key role in reaching that milestone, he said.
Men’s clothing is coming back, Donoho said. Hampstead’s JoS. A. Bank Clothiers, which reported mostly profitable quarters even during the Great Recession, saw its first-half profit this year increase by 19 percent to $38.4 million from the first six months of 2010, while comparable-store sales rose about 8 percent.
But with the housing market still in the doldrums, the furniture segment still is really hurting, with some going out of business in recent years, Donoho said.
“We lost some furniture-store members due to the recession,” Donoho said.
Liquor retailers report mixed trends.
“Consumers are very price sensitive,” said Betty Buck, president of Upper Marlboro beer distributor Buck Distributing, during a recent state forum. “People seem to be choosing not to drink more beer during this recession, unlike the trend in the past.”
Consumers’ preference for greater value does not mean they are not still purchasing higher-end items, said Chuck Ferrar, owner of Bay Ridge Wine and Spirits in Annapolis.
“They just want to buy those items on sale,” said Ferrar, also president of the American Beverage Licensees, a trade group for alcoholic beverage licensees.
More doors opening earlier on Black Friday
Last year, some retailers opened at midnight for Black Friday, the day after Thanksgiving that is historically one of the busiest of the season. More merchants are doing so this year.
“Early openings do seem to be a trend, as we received several more requests from retailers to open the doors at midnight,” said Joanna Caputi, director of marketing for Westfield Montgomery.
Among those opening at midnight on Black Friday at Westfield Montgomery are Macy’s, Sears, Banana Republic, Ann Taylor and the Gap. Macy's, Target, Furnish 123 and the Washington Redskins Store are among those opening at midnight at Westfield Wheaton Shoppingtown.
The malls will offer promotions, such as a $10 gift card for the first 500 shoppers to visit the Westfield malls’ concierge desk.
At Francis Scott Key Mall in Frederick, the list of stores opening at midnight includes Macy’s, the Children Place, Radio Shack and Victoria’s Secret. Some such as J.C. Penney and Sears are waiting until 4 a.m. to open.
JoS. A. Bank is starting Black Friday an hour earlier this year at 5 a.m. Sales run until 1 p.m. at its more than 500 stores across the nation.
The 10 items on sale are more than JoS. A. Bank has ever offered, said R. Neal Black, president and CEO. Last year, the retailer had eight items on sale for Black Friday.
Small Business Saturday enters second year
Small Business Saturday, a promotion by credit-card giant American Express and others that formed last year, is expanding to more locally owned stores on Saturday, as smaller merchants try to carve out a niche against the Walmarts and Targets of the nation. American Express is giving a $25 statement credit to card members who sign up online and use it to shop on Saturday at independent small businesses that accept American Express.
Last year, participating businesses reported a 28 percent increase in sales on that Saturday from the same day in 2009, according to American Express.
“When you shop small, you are building community, supporting the economy and making a stronger nation,” said Lene Tsegaye, owner of Kefa Café in downtown Silver Spring, in a statement. Kefa Café participated in the promotion last year and is among those doing so again Saturday.
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