|
Duluth retailer prepares for slow sales
|
DULUTH – David Kahn, the owner of the HobbyTown USA store in Duluth, hopes for a better holiday shopping season this year than last, but he's not betting on it.
"Last year was slow. What I was expecting was that last year people were shell-shocked," Kahn said. "This year I'm hoping that there was more planning."
He hopes local residents have been putting away a little money for Christmas, but whether that happens or not, he'll find out in the next six weeks.
His store on Satellite Boulevard has been open for 7˝ years. Fortunately his Business doesn't depend on Christmas sales. December sales are like two normal months combined, unlike some stores that do half their sales around the
holidays.
Like most retailers, Kahn has been very careful with his inventory, something his suppliers also are doing.
"If it ends up being a great Christmas season, then everybody will be out of everything," he said.
|
| 
advertisement |
It's safer to play it safe. Last year, businesses were stuck with a lot of inventory after the holiday shopping season. They had to sell that excess inventory at great discounts. They aren't taking that chance this year.
"From a shopper's standpoint, I would not leave it until the last minute," Kahn said.
People who want to do last-minute shopping might find themselves out of luck as the small amount of inventory on store shelves will be gone.
According to the International Council of Shopping Centers (ICSC)-Goldman Sachs Consumer Holiday Spending Survey, Kahn is correct. The retail industry has been shedding inventories — so as not to be in the same situation as they were in last year when demand fell sharply and the "2008 lean inventories" turned into high inventories that were sold at heavily discounted prices. As with the case with department stores, apparel inventories are lower than a year ago and also running less than the pace of sales. The net result is low inventories coming into the holiday season.
Unemployment rates that broke 10 percent in October didn't have the affect on the consumer survey that the ICSC expected. Only 23 percent of consumers cited unemployment or reduced hours affecting their holiday spending plans. Personal debt is slowly coming down and was cited as a worry for only 17 percent of consumers.
"So, maybe, just maybe, the 75 to 80 percent of households that are little affected by debt, job loss and other worries will carry the day and holiday season. Let's hope," ICSC staff penned in their Nov. 6 Retail Real Estate Business Conditions report
Compared to 2008, the owner of the Duluth Hobbytown USA said his store's sales were down for the first half of 2009. Sales began to taper off starting in August 2008. Since August of this year, sales have been pretty flat, Kahn said.
With radio-controlled cars, trucks, boats and planes filling 80 percent of the shelves of Hobbytown USA, he doesn't ever deal in the "gotta have it" toy of the season. But that's OK with Kahn, as he said he doesn't believe those Tickle Me Elmos of past seasons do much good in generating significant sales. Having a "gotta have it" toy wouldn't generate sales for other merchandise. Besides, most of those types of toys are for children ages 2 to 7, an age range that doesn't fit in HobbyTown's demographics.
Tags: Business
| |
|
|
