A spooky retail season
POSTED: Sunday, October 19, 2008
The Costume Closet, a Kapahulu-based costume rental and sales store, achieved record sales last year. “;It was our best year ever,”; said owner Yvette LaFontaine, who opened her year-round small business in 1991. “;I even hired a full-time manager.”;
| The National Retail Federation estimates that consumers will mark Halloween in a variety of ways:
Source: National Retail Federation
|
Now, the lagging U.S. economy has cast a shadow over consumers, and LaFontaine is bracing for what potentially could be her most challenging year since opening her shop in 1991. While Christmas sales are the big determiner of year-end performance for most traditional retailers, mid-September to Nov. 1 is the critical period for LaFontaine and a handful of Hawaii retailers and small business owners that cater to the Halloween crowd.
“;We're a year-round costume shop, but we do 50 percent of our sales during the Halloween time frame,”; LaFontaine said. “;Halloween is when I make the most money and I have to set aside some of this money to make it throughout the year.”;
The National Retail Federation has forecast that Halloween celebrations will reach $5.77 billion this year as consumers look to escape everyday realities and take advantage of the calendar opportunity to celebrate Halloween all weekend long. Still, for the Hawaii businesses that depend on holiday sales, there are a lot of variables at play.
Traffic at LaFontaine's shop has been steady through the first two weeks of October; however, it's hard to say how the season will turn out until the final stretch, she said.
“;Usually it's really busy right before the holiday,”; LaFontaine said. “;Often, we'll have more than 30 people in the store and lines stretched outside.”;
However, if the traditional holiday rush occurs this year, LaFontaine and General Manager Regan Yamashiro will have to field most of the traffic themselves, she said.
“;I usually hire about four seasonal workers, but I don't think I can afford it this year,”; she said. “;All of our small-business costs are going up and consumer spending is mostly down.”;
HALLOWEEN SPENDINGThe National Retail Federation has forecast that consumers will spend the following amounts from mid-September through Nov. 1:
Source: National Retail Federation
|
Though the economy is struggling in Hawaii and elsewhere, Tracy Mullin, president and chief executive of the National Retail Federation, has said that Halloween sales may be a bright spot for retailers this fall.
“;Consumers—who have been anxious and uncertain for the past several months—may be looking at Halloween as an opportunity to forget the stresses of daily life and just have a little fun,”; said Mullin, who represents 1.6 million U.S. retail establishments and more than 24 million employees within the $4.5 trillion retail industry.
“;I've noticed more people are having Halloween parties this year and that they are gravitating to funny costumes,”; LaFontaine said. “;They seem to want to pick up their spirits.”;
Price Busters, one of Hawaii's discount retailers, has staked an entire new store concept on the idea that despite the economy Hawaii consumers will gravitate toward seasonal and party goods.
The chain launched The Seasonal Store on July 19 in Ward Centre and also opened locations at Ala Moana Center, Windward Mall and Kapolei in August, said Julie Plant, Price Busters' director of stores in Hawaii. In March, Price Busters plans to transition its seasonal store at Windward Mall into a new concept called Let's Party Hawaii, she said.
“;The focus at our seasonal stores is Halloween and Christmas and all the other seasons in between,”; Plant said. “;The one thing about Hawaii consumers is that they love a party.”;
As the economy has lagged, value-oriented Price Busters and The Seasonal Store have grown their customer base, Plant said.
“;Foot traffic is up about 8 percent on the weekends at all our stores and Halloween sales are up over last year,”; she said.
That's good news since Halloween merchandise takes up about 25 percent of the retail floor space in Price Busters and ranges from 50 to 95 percent of the space in the chain's seasonal concept stores, Plant said.
“;Halloween is a huge predictor for us,”; she said. “;During the fourth quarter is when customer are willing to spend money. The other holidays are important to us, but there's definitely a focus on Halloween, Christmas and New Year's to make it happen.”;
During these trying economic times, value resonates with consumers, Plant said.
“;They are still buying, but they want value and good customer service,”; she said.
Harvest and Christmas items including a vibrant orange and red autumn wreath were peaking out of Christina Smith's shopping cart earlier this week as she browsed the aisles at The Seasonal Store in Ward Centre. The military wife and mother said she is expecting her husband, Ensign Gregory Smith, and his crew on the Chung-Hoon DDG-93 to make it home by Thanksgiving, and she is gearing up to celebrate in style.
“;Decorating for the holidays helps lift the spirits while he is deployed,”; Smith said.
While Smith primarily was shopping for Thanksgiving party supplies, she also had picked up a Christmas gift and was checking out some additional Halloween and harvest items for her children.
“;I'm pretty happy with the prices here,”; she said.
The NRF has said that Halloween sales may bring needed relief to consumers and retailers who likely will experience their most meager Christmas and New Year's holiday sales since 2002. A number of economic indicators point to a challenging holiday for retailers. A struggling housing market and rising unemployment, accompanied by meager income gains, will continue to hamper the consumer throughout the season. Food and energy costs will remain high.
That said, the NRF's Halloween consumer intentions and actions survey shows that 64.5 percent of consumers plan to celebrate Halloween this year as compared to 58.7 percent a year ago. And, those that plan to celebrate plan to spend $66.54 on the holiday, up from $64.82 one year ago. The poll of 8,167 consumers was conducted from Sept. 2-9 and has a margin of error of plus or minus 1 percent.
“;After months of bleak economic news, consumers are looking for a reason to let loose,”; said Phil Rist, vice president of strategy for BIGresearch, who put together the NRF Halloween survey. “;And with Halloween falling on a Friday this year, consumers may plan to celebrate all weekend long.”;
In Hawaii, there are a number of organized Halloween activities this year designed to help prompt consumer spending, LaFontaine said. The Arts District in Downtown Honolulu is putting on Hallowbaloo from 3 p.m. on Halloween, she said.
“;They want to get consumers out,”; LaFontaine said. “;I think they know that we could all use a little cheer.”;
Some consumers might be more frugal this year, though. Though Michelle Hong, 7, was hamming it up in a plastic mask of Sen. Hillary Clinton on Tuesday, she was looking for some princess shoes and a tiara to breathe new life into last year's costume.
And, Kharolina Lampe, the owner of Kharolina Costumes, said that she has lost a few costume rentals because she does not accept credit cards.
“;They were willing to pay, but only if they could put it on their credit cards,”; Lampe said. “;People don't have as much discretionary income.”;
Lampe has noticed that she has fewer lookers this year; however, she said that costume rentals have remained about the same and the regulars are calling.
“;It'll be jamming the last two weeks of Halloween up to Nov. 1,”; she said. “;Costumes have the ability to take people out of themselves.”;
On the other hand, Christmas could be another story for Hawaii retailers. The NRF has forecast that Christmas sales will rise 2.2 percent this year to $470.4 billion, a gain that falls well below the 10-year average of 4.4 percent holiday sales growth. And with the current financial industry crisis continuing to chip away at consumer confidence, NRF does not foresee an economic turnaround until the second half of next year.
