Holiday season: December economics in New Mexico

New Mexico Business Journal, Dec, 1990 by Kathleen Young

HOLIDAY SEASON

On your mark, get set, go! It's that time of year again, and like runners in a marathon, consumers are off, racing from store to store in a flurry of holiday shopping.

Armed with credit cards and checkbooks, they go in search of the perfect gifts, engaging in a true test of the shop-till-you-drop theory. Smiles are rare, hair-pulling is not. For the average consumer, it's not an occasion for glee; and more than one 'Bah, Humbug!' can be heard.

But for the local merchants, it's a different story.

This is truly their season to be jolly, for Hanukkah and Christmas can provide a tidal wave of increased business and profits that exceeds every other month of the year.

"It's our busiest time of the year," says Pat Gage, owner of Popcorn Alley in Hobbs, which offers a variety of gourmet popcorn, candies, jellies and jams. "Probably two-thirds of our annual income comes from this season."

In December 1989, according to the state's Taxation and Revenue January 1990 gross sales receipts figures which reflect December spending, New Mexicans spent more than they did in any other month that year.

Statewide, total gross sales receipts for all industries amounted to $2,923,448,197, almost $40 million more than the next highest figure reflecting spending for July. Gross sales receipts for the retail industry totalled $899,176,633, up almost $128 million over the next highest month of June (as reflected by the July total retail gross sales receipts report).

Department stores alone reported a total gross sales receipts figure of $123,090,418 for December. That was up more than $41 million over the next highest month of February (as reflected by the May total department stores gross sales receipts report).

"The December period, volume-wise, accounts for about 15 percent of our total annual business," notes Albuquerque's J.C. Penney's general merchandising manager Robert Followell. "Profit-wise, it's about 16 percent." J.C. Penney's has a good share of the New Mexico retail market with 13 stores around the state.

Total gross sales receipts from miscellaneous retailers statewide was $240,214,800, an increase of more than $32 million over the next highest reported spending for June.

"Definitely sales go up in December," exclaims Cathy Rudy, owner of Chocolate Enchantment in Santa Fe. The shop specializes in fine chocolates, candies and gift baskets.

"Roughly, we did about three times the amount of business last December as we did the rest of the year. I'd say December counts for about 20 percent of our annual income."

Daniel Fognini, owner of the Casa de Oro jewelry store in Mesilla, says his business always increases at this time of year, "as much as 50 percent." Fognini designs and sells custom-made gold, turquoise and silver jewelry, as well as Indian jewelry.

Old Pecos Gallery in Carlsbad, which touts a variety of unusual gifts from handcarved Santos and Indian sculptures to fine art and clothing, relies on the holiday season for about one-third of its annual income, says owner Karen Johnson.

In an effort to attract more holiday shoppers, some merchants gear their store exclusively to the holidays at this time of year.

Felicity Flowers and Gifts in Albuquerque is one example.

Owner Rosie Montoya says the whole store is Christmas oriented beginning in November. Her two-story store contains 17 rooms and each has a different Christmas-oriented theme. "If you want the customer coming in, you have to give them something. This is a production," says Montoya, whose holiday sales equal 40-50 percent of the store's annual income.

Children's gifts, of course, are a big focus for holiday shoppers. Angela Bourdon, spokesperson for Toys "R" Us, a national toy store chain, says their stores rely on December to provide almost half of their annual income. Currently, Toys "R" Us has one location in Albuquerque.

Eating and drinking establishments also prosper at this time of year. Business for Russells Bakery and Restaurant in Albuquerque, which also provides party catering, "is about 50 percent greater than average in December," says owner Pete Smargon.

Gift wrap and holiday greeting cards are a must for most consumers. Paper Unlimited in Santa Fe, which sells giftwrap, greeting cards and gifts, earns about 40 percent of its annual income from the holiday season, says owner Grace Davis.

According to Jim Freeman of the State Forestry Department, New Mexico's Christmas tree market in the past has totalled approximately $5 million.

All sellers of commercial Christmas trees are required to buy tags from the Forestry Department, and last year, Freeman says, 203,000 tags were sold.

Wholesalers also make more money at this time of year. Richard Burch of Southwest Distributing Company, a statewide wholesale liquor distributor, says spirits and wine sales increase 30 percent for both November and December, and that those two months account for 23 percent of their total year's business.

Andy Anderson of Tularosa produces woodcrafted items such as grandfather clocks, bookends, and hourglasses and sells them on consignment through retail gift shops. "They really go at Christmas time -- it's the best time."