It's make-or-break time for shopping malls across the United States, some of which will make as much as much as 20 percent of their annual profits in the next few weeks. This year, they have reasons to be optimistic.
“Right now, low gas prices, increased consumer confidence, more jobs in the pot — simply put, more paychecks — those factors right now are contributing to a more confident and financially stable consumer,” said Kathy Grannis of the National Retail Federation.
The federation’s latest survey suggests consumers plan to spend, on average, about $800 per person, or about 5 percent more than they did last year. Some of that money will not be spent at traditional brick-and-mortar stores. Studies show nearly two-thirds of American consumers will start their holiday shopping online, checking out the best deals by phone or on their laptops, said retail analyst Ramesh Swamy.
“In total, digital, including social media, is going to influence 50 cents on every dollar spent in the store," he said. "So consumers are going to be using their tablets, mobile and other digital channels to actually do a lot of pre-work.”
Holiday e-commerce is projected to rise as much as 14 percent, or just a little more than $100 billion, between now and December. Gift card purchases are also set to break a record of $31 billion during the holidays. But for the vast majority of shoppers, said Michael Gregory at BMO Capital Markets, it's tough to beat tradition.
“There’s nothing like going out in the holiday season and, you know, going shoulder to shoulder with the crowds — it’s part of the experience," he said. "And I think that’s a key thing for this holiday season. And I think consumers want to have that experience.”
Some of the bigger retail stores plan to take advantage of improving consumer confidence by starting their "Black Friday" specials earlier and spreading their discounts over several days. All told, the National Retail Federation projects a 4.1 percent increase in holiday sales, or about $617 billion, between now and the end of December.
