On Heels Of June Swoon, Some Retailers Roll Out Holiday Sales Early This Year

Sears - Christmas in July
Although retailers continued to slash prices on seasonal merchandise, June sales were once again a disappointment for retailers, decreasing 3.8% unadjusted over the last year, according to the National Retail Federation. Forecasts for back to school are not looking good either. The average family with students in grades K-12 is expected to spend $548.72 on school merchandise, a decline of 7.7 percent from $594.24 in 2008, according to the National Retail Federation’s 2009 Back to School Consumer Intentions and Actions Survey, conducted by BIGresearch.
“Back to school is always a pretty good barometer for retail health and for what the fall is going to look like, and this year I don’t think it’s going to be any different,” says George Whalin, Founder, Retail Management Consultants. “I think parents are going to be very cautious on what they spend money on. They’re going to buy the least expensive things they can get away with, but people are always going to spend more on their children than they do on themselves.” The survey found that over half (56.2%) of respondents are hunting for sales more often, while 40% plan to increase their coupon usage.

With such a grim outlook for the months ahead, some retailers have gotten creative with their efforts. Aiming to attract shoppers early, Sears Holdings Corp. recently rolled out Christmas in July, offering the “Christmas Lane” e-Commerce shop and Christmas boutiques at hundreds of U.S. Sears and K-Mart stores. Boasting its layaway plan, the retailer is hoping to attract customers by providing the ability to pay for holiday items over time. “Layaway is great for the lower income demographic, but it also comes with risk,” says Jim Dion, Founder & President, Dionco, Inc. “Often if times get tough for the consumer, they will take the item out of layaway and the retailer gets to return an item to stock that is four months out of season.”

Since June has validated the tough shopping climate, the question is: Does it make sense for retailers to think about the holiday shopping season earlier?

“I think it detracts from back to school and the other things that are going on this time of year. Consumers like holiday shopping but they don’t want it to be in your face half of the year. It doesn’t make good business sense to me,” says Whalin.

“Sears needs sales right now and the only season consumers are saving for is Christmas,” says Doron Levy, President, Captus Business Consulting. Levy says the effort is to be expected, and major chains in Canada have already begun clearing out summer stock aggressively, making little room for BTS and primarily focused on Christmas. “The seasonality focus just isn’t there anymore,” he says. “Back to school is a complex season to merchandise and run effectively. Margins are much higher with Christmas goods so it makes sense for a retailer to put resources into faster moving lines.”

Whalin says retailers will proceed with the rest of the year cautiously, with a strong focus on value and price points. “We haven’t seen a good months now since August, which was the last decent month. This is the longest down month period we’ve ever seen, and I’ve been in [retail] a long time…If you look at a single category that’s suffered the most this year, it has been apparel. And that’s the biggest category of back to school,” he says.


Because the Sears holiday rollout is complete with an e-commerce portion, one analyst says there’s potential to drive store traffic. “Whether the Christmas Lanes drive people to the stores depends upon whether there is a reason for consumers to go to the stores,” says Camille Schuster, President, Global Collaborations, Inc. “Is the shopping experience different, a special deal, a broader selection of items or something that is desirable to consumers being offered at the stores?  If so, consumers will go.  If not, the experience will not transfer.” Schuster adds it will be difficult for Sears to keep the novelty alive until Christmas for shoppers.

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