Ho, ho, ho or bah humbug for Wichita retailers in 2003?
9:42:12 AM CDT - Tuesday, November 25, 2003
What is the outlook for retail sales for Christmas 2003? According to the results of the latest Grubb & Ellis/WSU Consumer Expectations Index survey, it's likely to be another year of slow sales for area retailers.
During the November 2003 survey, consumers were asked what they were planning to spend during the upcoming holiday season. Their responses indicate it could be hard for area retailers to boost 2003 sales compared to 2002. Only 13.2 percent of consumers expect to spend more than last year, 49.5 percent expect to spend the same as last year and 37.4 percent expect to spend less than last year.
When consumers were asked the same question in 2001 and 2002 the responses were similar (see Table 1 below).
"The past two years consumers have told us they were going to hold the line on holiday spending and did," said Janet Harrah, director of the Center for Economic Development and Business Research at Wichita State University. "Given that consumer spending accounts for more than two-thirds of the U.S. economy, it can shape the future direction and speed of our economic recovery both locally and nationally."
Since peaking in fourth quarter 2001, taxable retail sales in the Wichita metro area have declined by nearly $263 million or 14.6 percent. Fourth quarter retail sales declined last year by 1.7 percent compared to fourth quarter 2001. Given the retail sales trends for the past two holiday seasons, coupled with weak consumer spending expectations, it does not appear that sales are likely to grow much this year compared to 2002.
Survey respondents were also asked how much they plan to spend. More than 80 percent of consumers plan to spend less than $750. Just 10.6 percent of consumers plan to spend $1,000 or more. For many retailers it is the holiday season that determines whether they have a profitable or unprofitable year. "It looks as if retailers will need to make an extra effort this year to attract consumers and entice them to spend more freely," said Harrah.
The Consumer Expectations Index is derived from the results of a monthly survey of approximately 400 households in the Wichita metropolitan statistical area, comprising Butler, Harvey and Sedgwick counties. The survey has a margin of error of plus or minus 4.9 percent. For a statistical breakdown of the survey results, go to http://webs.wichita.edu/cedbr.