Holiday season: December economics in New Mexico

New Mexico Business Journal, Dec, 1990 by Kathleen Young

What determines how profitable the holiday season is each year? "The two most important factors," claims Brian McDonald at UNM's Bureau of Business and Economic Research (BBER), "are what economists call real disposable income growth and consumer confidence.

"If there are good increases in disposable income, you'll see good increases in retail business. Consumer confidence," he says, "is whether consumers feel optimistic or not and their willingness to take on additional debts."

Yvette Stout of Page One in Albuquerque says she has been in business more than nine years and claims her holiday business has continued to increase over the years. The reason, she says, "is because our product mix has increased." The store sells a variety of items, from books and music to software.

Burch of Southwest Distributing, however, seywx e wepekfwpi itwandw ne hes

been on the decline for a number of years.

"It's the publicity with drinking and driving," he says.

This works to the advantage, however, of Albuquerque Cab Company. Manager Baheej Hindi says that "a lot of people, before a party, will now ask to have a cab at their disposal."

Art Gardenswartz of Gardenswartz Sportz, a retail sporting goods operation with six locations in Albuquerque, says 40 to 50 percent of their holiday sales is outdoor and ski-oriented.

"If we have good weather,c he maintains, "it's going to be a good volume and profit. If the weather is poor, the volume drops and our profit margin does, too."

What does this season hold in store?

"I think this Christmas will be tough for retailers," ventures BBER's McDonald. "Consumer confidence is at an eight- or nine-year low because of the gas prices, and the possibility of war and recession. Consumer willingness to take on additional debts will be low."

Vince Olguin, assistant manager of Sunwest Bank's Wyoming Branch in Albuquerque, says the bank gets a certain amount of loan business during the holidays but the trend is away from loans.

But others are more optimistic about this year's holiday business.

Montoya of Felicity says she is looking forward to the best Christmas the company has ever had.

"My motto this year is," adds Montoya, "if there's a recession, I'm not participating!"

Kathleen Young is a free lance writer based in Albuquerque.