Bad weather creating bad shopping season

December 21, 2008 5:27:25 PM PST
The bad weather is making what has already been a poor holiday shopping season even worse.

With just three full shopping days left before Christmas, retailers big and small are pulling out all the stops to lure shoppers inside their stores.

Small retailers really count on foot traffic for their sales, especially just before Christmas. They are concnerned that because of cold and wet weather, a lot of their potential customers have gone indoors to places like malls.

Small retailers have seen sales drop all year and they do not seem to be improving this last week before the holidays, especially at Oakland's Jack London Square

"The sales right now, we're thinking it's not so good right now. So, we hoping it will be picking up next year," said store owner Lan Vie.

Lan Vie has seen sales drop 60 percent at her store since last year and says nothing, not newspaper advertising nor sales that feature items at half price, is making a difference.

The rain is not helping either.

"It's raining outside. So the people don't like to walk outside. They like to get something at mall much better," she said.

USF Business and Management Professor Eugene Muscat says many of these small and large retailers prepared for a potentially bad season by reducing their inventory.

"So I think everyone is going to have a meager end-of-year, but they prepared for this. They purchased fewer goods. They've laid of lots of staff, " he said.

Muscat sees sales dropping as much as 10 percent this season here in the Bay Area.

According to the National Retail Federation, 20 percent of consumers have not even begun their holiday shopping yet. And, only 30 percent are all done. But, when people are buying, they are not spending as much.

"Probably spending less this year. It's just not as big a deal, Christmas, this year for some reason. I don't know," said shopper Robin Huffman.

Store owner Carl Lantz has a theory.

"I don't think it's the weather. I've been doing this business for a long time. I think it's mainly the herd mentality. People feel scared," he said.

Lantz owns Murasaki at Jack London Square. He says fear has dropped his sales through the floor.

"On Sunday we would normally make $800. It went down to almost nothing," he said.

While small shops are hurting, Professor Muscat says it is the larger retailers who really depend on end-of-year sales for much of their profit.

"The larger retailers tend to be the ones that really focus on getting maybe 30, or 30-plus percent. They're real high volume," he said.

Muscat also believes that people are staying home and actually shopping online because of the bad weather. He is also concerned that bad seasonal sales will force some big retailers to close some of their less profitable stores sometime early next year.


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