Retailers hope for sales surge - East Valley Tribune: Business

Retailers hope for sales surge

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Posted: Wednesday, July 23, 2003 11:15 pm | Updated: 1:49 pm, Thu Oct 6, 2011.

Erica Everts of Scottsdale sailed through Target, stocking up on Kleenex, pencils, dry-erase markers, audio tapes and hand sanitizer, crossing each off the list of required items for second-grade students at Desert Canyon School.

Of more interest to her 7-year-old daughter Makenzie is an already purchased Old Navy backpack and fashion apparel.

“I already got one outfit, and I will probably get more,” Makenzie said.

Valley monsoons, which finally blew into town last week, typically signal the end of summer vacation and the start of back-to-school shopping.

Industry watchers around the East Valley and around the country will be keeping tabs on consumer spending for the next few weeks, hoping a spending surge will indicate that a much-needed retail recovery has taken hold.

Back-to-school shopping could be the bellwether, said Sheila Hunter, marketing director for Fiesta Mall in Mesa. The July-through-August school spending generates about 15 percent of the mall’s annual sales, making it the second-biggest shopping occasion after the November-December holiday rush, Hunter said.

None of the industry experts are making overly optimistic predictions, but there are some positive signs.

“Right now several economic indicators are falling into place — low interest rates, the (child) tax credit, the tax cut, a high number of mortgage refinancings, the improving stock market,” said Ellen Tolley, spokeswoman for the National Retail Federation, an industry trade group. “All of this is making consumers feel a little more secure. They have more money in their pockets and are more willing to spend.”

Still, Tolley said her organization needs to see more substantial growth before counting on a sustainable upswing. A National Retail Federation survey, which asked 8,835 U.S. consumers in early July about their back-to-school shopping plans, showed just a slight upward movement.

In the poll, families with school-age children said they will spend an average $450 to outfit their kids with everything from the latest style of clothes to calculators, up from $441 in 2002.

Seventy-eight percent of shoppers said they will shop at discount department stores like Target and Wal-Mart. Half of the shoppers plan to spend at least part of their school budget at mall department stores, and nearly a third said they will pick up some items at office supply stores.

Shari Haley of Scottsdale, said she will shop at least three or four stores to get her three boys — ages 5, 6 and 8 — ready for the new school year. “We’re still conservative,” Haley said. “We look for sales. I have a list for all the stores of what’s on sale.”

But Haley said her shopping list is bigger this year, in part because of the growing list of required items sent to parents by cash-strapped schools. Haley’s children attend Paradise Valley schools.

“We even have hand soap on the list this year,” she said. “I thought that’s what we paid (taxes) for.”

In total, U.S. shoppers are expected to spend more than $14.1 billion to get their children ready for the new school year, the survey estimates. The children, especially teens, are expected to kick in another $750 million of their own money to stay stylish for school.

Hunter said the back-to-school shopping season is stretching over a longer period as more schools adopt year-round programs, so that makes it more difficult to track. But she said several Fiesta Mall merchants are expecting a 4 percent to 8 percent increase this year over 2002 school-focused spending.

Wal-Mart, which has weathered the economic downturn better than many retailers, said it expects July sales to come in at the high end of its previously predicted 2 percent to 4 percent increase over July 2002.

But the company isn’t stretching any further onto a limb.

“Forecasting the economy is tough,” said Wal-Mart spokesman Tom Williams. “But we will be ready. We’re getting aggressive in apparel. We’re going after the business, selling items we’ve never sold before, like Levis. That will help identify us as a destination for fashion among teens and preteens. We believe if we stock it right, they’ll come.”

Don Egler, store manager at a north Scottsdale Target, said he expects back-to-school shopping to start in earnest this weekend. For Egler it’s a wait-and-see situation. Besides the impact of the multi-year economic doldrums, Egler has watched his sales suffer from the opening of three new Target stores — at Desert Ridge Marketplace in Phoenix, further north in Scottsdale and in Fountain Hills — slicing up an area where his store previously stood alone.

“It’s tough to gauge what will happen this year,” Egler said.

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