Posted at: 11/23/2012 8:42 PM
Updated at: 11/23/2012 10:18 PM
By: Mark Saxenmeyer
Retailers started Black Friday earlier than ever this year, in part, because of concerns cautious consumers won't spend as freely this holiday season. A poor showing on Black Friday could stall the momentum of the economy overall, but locally at least, early revenue projections look promising.
The retail sector accounts for about 70 percent of the economy, and about 40 percent of most retailers' annual revenue comes during the holiday shopping season.
Retail analysts and economists alike say consumers are still struggling with employment concerns, wage and salary cuts, and underwater mortgages. yet despite all that they're still shopping.
According to Dr. Lorman Lundsten, a marketing and business professor at the University of St. Thomas, "A surprising number of people said that they were going to increase their spending." He's talking about the school's annual holiday spending survey, which predicted the average Twin Cities household would spend $773 dollars on holiday gifts this year, a 10 percent increase from last year.
Past, present or future economic woes don't seem to be worrying folks. "They're essentially used to the current level of pain that's out there and they've decided to proceed with their lives," Lundsten said.
On a national scale, the National Retail Federation estimates overall sales in November and December will rise 4.1 percent this year, to more than $586 billion dollars. That's below last year's 5.6 percent growth, but growth nonetheless.
Mall of America is always a good indicator. Last year, the mall set a record on Black Friday with 217,000 people coming through its doors. Dan Jasper, a Mall of America vice president, said, "We actually think that we'll increase by somewhere between eight and 10 percent today, so that's a pretty hefty increase. And we believe that sales will follow along as well."
But what about the fiscal cliff, looming tax increases, and the fear of unemployment?
"I think some of those big macro economic things that we worry about," Jasper said, "I'm not certain that the general public does. I just think they see their family unit and go 'you know what, we're going to have a good holiday season'."
Mall of America expects a four to five percent increase in total sales for 2012, taking them well over $1 billion dollars.
Mark Saxenmeyer can be reached at email@example.com