Since gas and heating oil prices have increased in recent months, one might think people would be spending less this holiday season...not so. A recent report from National Retail Federation is predicting a 4% increase in spending this season; electronics are the big items this season but so are many luxury goods.
“They say they're going to try to keep it at a minimum but our family usually decides that they're going to give gifts and we're gift givers,” says Renee Pavlov who was shopping at Eastview Mall on Friday.
“I look for deals but if I find something that I know the person absolutely loves and I know the person likes it, I'll buy it,” says Debra Honan another “Black Friday” shopper at Eastview Mall.
In fact, Eastview Mall’s been brimming since with shoppers not only looking for deals but buying big ticket items as well.
“This is obviously going to be a very big electronics year, you know the IPODs, the flat screen TVs,” says Michael Kauffman, general manager for Eastview Mall, part of the Wilmorite Corporation, “we feel pretty confident heading into the last two months of the year, we think it's going to be a good season for us.”
Eastview mall is banking on many of its new stores for profit; higher-end retailers which have weathered the recent bad economic climate. The Apple Store, Coach and Williams-Sonoma are examples of newer, higher-end stores at Eastview which are expected to have good economic returns this holiday season.
“It's not surprising that people on the upside of the market are perhaps spending a little more,” says Eugene Fram, Ed.D, J. Warren McClure Research Professor of Marketing at RIT.
Fram says he is skeptical of the National Retail Federation’s sales forecast this season.
“My expectation is that it may be as low as three-percent. How the Christmas season goes will impact how business to business or industrial goods will do in the coming year.”
Fram says if shoppers spend beyond their means, which tends to happen every season, there will a big credit crunch on top of the already high gas, heating and food costs.
“So when you put it all together, for the Christmas season and into early next year, there are a lot of questions being asked and these are valid question.”
While some people are spending on luxury items this holiday season, there are also those who are paying close attention to the economic downturn. Mid-market and budget-conscious stores such as Target, Best Buy and Wal-Mart are expected to very well this holiday season.
“Target has done very well and Wal-Mart was off but it made a comeback in the next month or so,” says Fram.