With a slowing economy, a crumbling housing market, rising oil prices and defective toys from China, we’re left to wonder, what kind of Christmas is this going to be?
A very Merry Christmas, indeed.
The U.S. economy has been weathering one shock after another since 9/11.
Things that used to lead to crises and recessions somehow don’t anymore. And no matter what the economic news brings, consumers keep right on spending, particularly at Christmas.
Sure, the National Retail Federation is warning of slowing sales growth for November and December – but even here, the key word is still “growth.”
“Retailers are in for a somewhat challenging holiday season,” said Rosalind Wells, chief economist for the group. “With the weak housing market and current credit crunch, consumers will be forced to be more prudent.”
The federation expects sales to rise 4 percent over last year to nearly $475 billion. That’s below the 10-year average of 4.8 percent growth, but not as bad as Christmas 2002, when sales grew by only 1.3 percent.
What is it about retailers that they sound the alarm whenever their sales don’t grow as rapidly as the year before? What are they going to do if there’s ever an actual decline in sales? Jump out their one-story store windows?
Discover Financial Services reports that the dip we saw in consumer confidence over the summer may be over. Its consumer-spending confidence index, which surveys 14,000 adults about their spending habits, rose to 95.9 in September from 94.8 in August.
The survey showed that consumers are still pessimistic about the economy, but optimistic about their own finances.
“There has been a steady climb since June in the number of consumers who say they have money left over after paying their bills,” said Discover’s chief marketing officer, Margo Georgiadis.
Discount stores are expected to fare the worst this season, according to the retail federation. But luxury stores are expected to do well. The higher a person’s income level, the less he is affected by the rising cost of living.
Last week, Neiman Marcus, the 100-year-old luxury retailer, put out its opulent, fantasy Christmas catalog.
Its offerings include a $2 million rocket-powered aircraft, a $1.44 million submarine and more affordable gifts, such as a $73,000 cellphone encased in 18-karat gold and 7.2 carats of diamonds.
Then there’s the $75,000 animatronic Swami head in a crystal-ball-like bubble.
“A cutting-edge Artificial Intelligence robot that recognizes family members, can carry on conversations, develops relationships, and answers questions with fact-based advice,” the catalog says. “Now that’s going to freak out the kids.”
It’s nice to know someone might have 75 grand just to freak out the kids. Some kids are not going to get an animatronic Swami head this Christmas. Some kids are having their toys taken away.
Consider the plight of children with Thomas the Tank Engine collections.
This wooden locomotive and some of his rail-car friends were recalled in June because they were made in China with lead-based paint. Illinois-based RC2 Corp. gave consumers new toys for every defective toy turned in, plus a bonus toy. But now it appears that these bonus toys had lead- based paint, too. RC2 is now in the midst of a second recall as the holiday approaches.
“We understand how painful it can be to take a cherished toy from a child,” RC2’s chief executive wrote to customers. “Nevertheless, we urge you to immediately … return any of the newly recalled toys.”
Yet not even this Grinch can ruin Christmas. In a consumer survey by Denver-based online retailer eToys, 37 percent of respondents said they plan to spend the same amount or more on toys this year as in previous years, despite safety-related recalls at several major toymakers, including Mattel.
And 43 percent said they would purchase toys regardless of where they were made. I guess if you boycott Chinese toys, you boycott most toys.
So forget about your economic worries, open your wallets, shove a lead-painted toy in your mouth and have a Merry Christmas. Everyone else is.
Al Lewis’ column appears Sundays, Tuesdays and Fridays. Respond to Lewis at
/lewis, 303-954-1967 or alewis@denverpost.com.
