Colorado retailers get ready for Black Friday and sales tax

Colorado Springs Business Journal, Nov 19, 2004 by Stephanie Cline

Retail stores across America are dusting off their Bing Crosby records for another round of holiday cheer. People of all ages are working furiously to compose final drafts of their wish lists. Everything from MP3 players to Barbie dolls will soon be snatched off store shelves.

The average consumer is expected to spend $702 this holiday season according to results of the National Retail Federation's 2004 Holiday Consumer Intentions and Actions survey. This is a 4.5 percent increase over the average dollar amount for the 2003 holiday season. Consumer spending for this holiday season is expected to reach $219.9 billion nationwide according to the survey. The National Retail Federation survey polled 7,861 consumers between Oct. 6 and Oct. 14 and was conducted by BIGresearch.

Last holiday season, 400 people were surveyed at the Citadel Mall. The survey found that consumers spent an average of $614 on gifts, said Diane Loschen, senior marketing manager of the mall. Loschen said she expects a 2 percent increase in consumer spending at the mall over last year's figures. The Chapel Hills Mall also is predicting consumers will spend more this season. We're thinking about increases this year of 5 to 6 percent, said Jeff Koch, group general manager of the mall. We are anticipating a positive holiday season.

Scott Krugman, a spokesman for the National Retail Federation, said current retail trends nationwide have given the economy a great deal of hope for the holiday season. We're seeing a real turn- around, he said. Retail sales were up in the last three months. Most importantly, the election is done with. The 2004 campaign for the presidency, Krugman said, helped generate uncertainty lower levels of consumer confidence in the United States. I think when you're in an election year you hear a lot of negative things about the economy.

Nearly 25 percent of the retail industry's business is done in the fourth quarter according to the federation. And although the Friday after Thanksgiving, or Black Friday, is always referred to as the biggest shopping day of the year, most money is typically spent during the weekend before Christmas. Usually the Saturday before Christmas is the busiest shopping day in terms of sales, Loschen said. Black Friday is busy every year, Loschen said, but sales do not spike as much on that day as many people think.

Black Friday marks the day when retail outlets who have been unprofitable, or in the red start to perform better and get back in the black. Many stores, both local and nationwide, advertise big early bird specials for the day after Thanksgiving. Food coma or no, millions of people line up at 6 a.m. for free toasters and toy coupons.

Discount and luxury retail are expected to perform well, Krugman said. I think you're going to see increases at both ends of the spectrum, he said. This year's popular holiday gift items include iPod music players, Sesame Street's Elmo dolls - like the new Potty with Elmo and video games, Loschen said. With kids of an older age, the new Halo 2 game is popular, she said.

Holiday spending in Colorado Springs manages to bring in millions of dollars in sales tax collections even during economic down times. In 2003, the total for the 2 percent combined sales and use tax collections jumped from $8.65 million in December (from November sales) to $11.47 million in January (from December sales) according to the City of Colorado Springs Finance Department. Sales and use tax collections for October 2004 totaled over $10.5 million, one of the highest amounts for any month, other than January, in the last four years.

While the malls of Colorado Springs will be filled to the brim with shoppers, smaller retail outlets around town expect to experience increases in traffic this holiday season as well. Suzanne Doroski, buyer for Little Richard's toy store downtown, said she is optimistic the store will do well this season. We were down slightly last Christmas and in the few years before, she said.

Little Richard's carries items such as animal replicas, various types of arts and crafts kits and Folkmanis animal puppets - items shoppers may not find in larger retail stores. I think we have just a very different selection, Doroski said. We have a huge inventory for a little store. Doroski credits the store's dedication to customer service as just one of the qualities that helps draw people in. If you take care of your customers, you will succeed, she said. I don't worry about competing with Wal-Mart.

Krugman also sees customer service as a major contributing factor to small business success. I think the way smaller retailers differentiate from bigger outlets is in customer service and selection, he said. Being small has its benefits. Doroski and the Little Richard's staff cater to the natural inquisitiveness of children. Most toys are not battery operated, Doroski said. We focus on creativity, she said. Most people use the term 'educational toys.' And high-pressure sales tactics are not used at Little Richard's. We don't encourage customers to overbuy, Doroski said. It's more than just selling to us.