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New Research: Costco Could Be Big Winner During 2011 Holiday Season

Despite recent reports noting that increased e-Commerce income could contribute to a successful 2011 holiday shopping season for retailers, new analysis from BIGinsight research reveals that the opposite could be true.

In a September BIGinsight survey of more than 9,000 consumers, nearly 40% of adults 18 years and older noted that they plan to spend less on gifts this year, while 32.3% said they plan to spend the same amount. While only 5.9% anticipate spending more on friends and family this year, 23.4% of consumer said it’s too early to finalize their budget plans.

But at least one retailer may outpace others, if BIGinsight research proves true. Costco customers were the only survey respondents who said they are more positive about spending this year versus last year. Conversely, Sam’s Club shoppers are more negative about holiday spending this year, along with customers of Nordstrom, The Gap and Toys R Us. Macy’s and eBay shoppers remain neutral, reporting a similar spending outlook compared to 2010.

BIGinsight’s Diffusion Index — which calculated the difference between consumers who plan to spend less and who plan to spend more — revealed that spending plans across retailer types are influenced by the current economy. Current sentiment is worse than last year, indicating a potentially bumpy road for e-Tailers, specialty, department and discount stores alike, according to BIGinsight.

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Retailers Hedge Their Holiday Bets

Consumers’ overall pessimistic view of this year’s holiday shopping season may severely impact brick-and-mortar stores and their holiday staff. Best Buy Co. recently announced that it has cut its 2011 season hiring plans in half in order to limit costs. In 2010, the electronics retailer hired 29,000 workers for the three-month shopping period. This year, the retailer is opting for 15,000 workers. To compensate for the staff cut, store associate hours will increase.

“Our plan isn’t built or predicated upon a meaningful move in the economic environment,” said Best Buy Chief Executive Brian Dunn in an interview with Reuters. “The consumer is being really careful about where he or she is spending the dollars, and I think that will continue through the holidays.”


In an effort to boost holiday sales, Best Buy will offer special, limited-time services, including free tech support and a long window for product returns. The retailer also will promote items that run for $100 and under to encourage more sales. Product assortment of the season’s “hottest gifts,” can be viewed via the Best Buy digital look book.

“We’ve devoted the past year to collecting insights from our customers and employees around the ideal holiday shopping experience,” Dunn said in a company statement. “They’ve helped us define what a ‘hassle-free holiday’ should be, and that’s why we’ve combined a competitively priced and hot product selection with customer support in every channel, and removed loopholes like re-stocking fees. During this important holiday selling season, we’re confident we have the people and tools to match you with the perfect gift.”

 

But some retailers are choosing to buck the analyst predictions. Macy’s Inc. is planning to increase its part-time holiday staff, up 4% over last year with plans to hire 78,000 in 2011 vs. 75,000 last year. Macy’s is banking on recent successes to continue through the holidays. In September the retailer reported that its Q2 earnings grew by 64%; and company stock is up approximately 13% in the past year.

 

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